Stocks hammered as sell off moves from tech to other sectors

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Investors pulled back on stocks Tuesday as a sell off that began in tech companies broadened to other sectors, sending the major US indices down.

The Dow Jones Industrial Average tumbled about 450 points, or 1.3 percent, in mid-day trading. The S&P 500 was 0.8 percent lower and the tech-heavy Nasdaq Composite edged just 0.1 percent lower, but was down as much as 2.2 percent earlier in the day.

Investor concerns over rising inflation costs have hit high-growth tech stocks in recent weeks. The Nasdaq is down nearly 5 percent since the start of the month. But the sell off spread Tuesday to other sectors, hitting everything from retailers to industrials and banks.

“What started in technology earlier this month has finally moved over to the broader markets,” Ryan Detrick, chief market strategist at LPL Financial, said. “Although we are coming off a record earnings season, continued supply chain and labor shortages are adding to potential inflationary pressures.”

Companies from Occidental Petroleum and Home Depot to Caesars Entertainment and home-builder D.R. Horton were among the stocks leading the markets lower. All traded at least 3 percent lower in afternoon trading.

There were, however, some companies that bucked the trend. Palantir, for example, rose more than 7 percent after reporting 49 percent growth in sales for the first quarter.

Investor fears about the market were helped by recent data from the Labor Department that showed job openings soared to a record high while companies struggled to fill the positions. The data helped spook investors over concerns of a labor shortage just as the economy is heating up.

Along with the labor shortage, fears of rising costs due to pent-up demand and supply-chain issues are also likely hurting investor appetite for the months ahead.

Tuesday’s declines sent the Cboe Volatility Index, or VIX, a measure of fear in the markets, climbing higher as volatility returned to the market. It traded as high as 23.73, levels not seen since March, before shedding some of those gains. It’s still up almost 10 percent on the day. The VIX has remained below 20 in recent weeks as the stock hit fresh highs.

Brian Price, head of investment management for Commonwealth Financial Network, said the markets might continue to be bumpy in the weeks to come until there’s more clarity on the spending and tax plans coming out of Washington.

The Nasdaq Composite edged just 0.1 percent lower as investors sell off tech stocks. 

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