Tech stocks take a tumble to pull US market lower
Technology stocks slammed into reverse on Monday overshadowing gains in other areas of the US market to send indexes lower.
Treasury bond prices and gold rose, meanwhile, as investors looked for safer places for their money following the latest escalation in the heated rhetoric between the United States and North Korea.
Stock markets around the world were mixed after Germany's Angela Merkel - the leader of Europe's largest economy -retained her position, though her political strength may have weakened.
The Standard & Poor's 500 index dropped 5.56 points, or 0.2%t, to 2,496.66. The Dow Jones industrial average fell 53.50 points, or 0.2%, to 22,296.09, and the Nasdaq composite dropped 56.33, or 0.9%, to 6,370.59.
Smaller stocks held up better than the rest of the market, and the small-cap Russell 2000 index rose 1.18, or 0.1%, to 1,451.96.
The day's action was centered around the technology sector, and tech stocks in the S&P 500 lost 1.4%. That is more than three times the loss of any of the other 10 sectors that make up the index, and the losses were broad: Facebook fell 4.5%, Nvidia lost 4.5% and video-game developer Electronic Arts lost 3.6%.
Any stumble for tech this year has been notable given how much better it has done than the rest of the market. Tech stocks in the S&P 500 have jumped 23% in 2017, double the S&P 500's gain.
As investors moved out of tech stocks on Monday, some money flowed into areas of the market that have not done as well.
Energy stocks, which have been the worst performers in the S&P 500 this year, had the day's strongest gains. Marathon Oil gained 3.1%, for example, and Noble Energy rose 2.7%.
Genuine Parts had the biggest gain in the S&P 500 after it said it would buy Alliance Automotive Group, a European distributor of auto parts, tools and workshop equipment. Genuine Parts valued the deal at 2 billion dollars, including debt.
Genuine Parts gained 5.24 dollars, or 6%, to 93.22 dollars.
The stock market has been remarkably placid for much of this year, and the biggest move for the S&P 500 last week was a dip of just 0.3%. A few events are on the schedule for this week, though, which could make markets more active.
Federal Reserve Chair Janet Yellen will give a speech on inflation and monetary policy on Tuesday, one of several central bankers on the schedule for the week. Investors are also waiting to hear more details about President Donald Trump's plans to cut taxes.
Investors were also keeping a close eye on tensions between North Korea and the US.
In overseas markets, Germany's DAX index was virtually flat after Mrs Merkel won a fourth term. Her party and its allies, though, lost some seats as they turned in one of their weakest post-war results. The results sent the euro lower and underscored the challenge Mrs Merkel has in forming a coalition with new partners to lead Europe's biggest economy.
The CAC 40 fell 0.3% in Paris, and the FTSE 100 dipped 0.1% in London.
In Asia, Japan's Nikkei 225 rose 0.5%, South Korea's Kospi slipped 0.3% and Hong Kong's Hang Seng fell 1.4%.
The euro fell to 1.1846 dollars from 1.1941 dollars late on Friday, and the British pound slipped to 1.3470 dollars from 1.3527 dollars. The dollar fell to 111.61 Japanese yen from 112.05 yen.
AP
