US stocks suffer their worst week since 2011, as tech sector is punished and the Nasdaq loses another 3 per cent
- American stocks fell to 19-month lows on Friday, amid heavy selling fuelled by uncertainty in Washington and the risk of a government shutdown
US stocks sank to a 19-month low on Friday to close out their worst week since August 2011, with every sector losing ground and heavy selling in technology shares driving the Nasdaq indexes into a bear market.
Heavy volume sparked by the simultaneous expiration of futures and options lashed stocks that have been under pressure all week from concern over rising interest rates and the threat of slower global growth. Renewed personnel turmoil in the White House and the growing likelihood of a government shutdown added to investor anxiety before the holidays.
Dovish comments from a Fed official gave an early boost to the S&P 500, but renewed selling in some of the bull market’s biggest winners sent the index lower. It is now down over 17 per cent from its record.
The Dow was down 1.81 per cent, the S&P 500 finished off by 2.06 per cent and the Nasdaq suffered a bruising 2.99 per cent drop. The broadly representative S&P 500 had its worst week since August 2011, while the Dow and the Nasdaq suffered their worst weeks since October and November 2008 respectively.
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Every member of the Nasdaq’s FANG cohort – Facebook, Amazon, Netflix and Google (now Alpabet) – lost more than 2.5 per cent, while Twitter plunged more than 6 per cent. The Cboe Volatility Index, known as the “fear gauge,” rose above 30 to hit a 10-month high. The dollar advanced as China signalled an easier monetary policy, and bonds retreated across Europe.