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* Nasdaq drops more than 4%
* Twitter falls as short-seller Hindenburg flags risk to
Musk deal
* Indexes: Dow down 2%, S&P 500 down 3.2%, Nasdaq down 4.3%
NEW YORK, May 9 (Reuters) – The S&P 500 ended below 4,000
for the first time since late March 2021 and the Nasdaq dropped
more than 4% on Monday in a selloff led by mega-cap growth
shares as investors grew more concerned about rising interest
rates.
The Nasdaq closed at its lowest level since November 2020.
Apple shares dropped 3.3% and were the biggest weight
on the Nasdaq and the S&P 500. Microsoft Corp dropped
3.7% and Tesla Inc fell 9.1%.
Investors are worried about how aggressive the Federal
Reserve will need to be to tame inflation. The U.S. central bank
last week hiked interest rates by 50 basis points.
Benchmark 10-year U.S. Treasury yields hit their
highest levels since November 2018 before easing on Monday.
“Markets are digesting the start of a return to a more
normal monetary policy environment,” said Kristina Hooper, chief
global market strategist at Invesco in New York.
“Moving more aggressively (on rates) raises the specter of a
recession, especially with all of these complications – high
inflation, Russia’s invasion of Ukraine, COVID-related supply
chain disruptions,” she said.
Investors have also been worried about an economic slowdown
in China following a recent rise in coronavirus cases.
The Dow Jones Industrial Average fell 653.67 points,
or 1.99%, to 32,245.7, while the S&P 500 lost 132.1
points, or 3.20%, to 3,991.24, its lowest close since March 31,
2021.
The Nasdaq Composite dropped 521.41 points, or
4.29%, to 11,623.25.
The S&P 500 is now down 16.3% for the year so far.
Among the hardest hit in the recent selloff have been
technology and growth stocks, whose valuations rely more heavily
on future cash flows.
All S&P 500 sectors ended lower on Monday except for
consumer staples, which rose 0.1%.
The energy sector fell 8.3% as oil prices dropped.
The S&P 500 growth index was down 3.9% on the day,
while the S&P 500 value index fell 2.5%.
Twitter Inc shares eased more than 3% as Hindenburg
Research took a short position on the social media company’s
stock, saying the company’s $44 billon deal to sell itself to
Elon Musk has a significant risk of getting repriced lower.
Volume on U.S. exchanges was 15.29 billion shares, compared
with the 12.34 billion average for the full session over the
last 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a
7.18-to-1 ratio; on Nasdaq, a 5.44-to-1 ratio favored decliners.</…….
