A broad sell-off in technology companies pulled U.S. stocks sharply lower Monday, knocking more than 600 points off the Dow Jones industrial average.
The wave of selling snared big names, including Apple, Amazon and Goldman Sachs. Banks, consumer-focused companies, and media and communications stocks all took heavy losses. Crude oil prices fell, erasing early gains and extending a losing streak to 11 days.
The tech-stock tumble followed an analyst report that suggested Apple significantly cut back orders from one of its suppliers. That, in turn, weighed on chipmakers.
“With the news out of the Apple supplier this morning, you have the market overall questioning the growth trajectory as we look out to 2019,” said Lindsey Bell, investment strategist at CFRA. “We continue to like tech going into next year, but we think it could be a little bit of a rocky period for the group as we continue through the last two months of the year.”
The market's slide came after a two-week winning streak.
The Standard & Poor’s 500 index dropped 54.79 points, or 2%, to 2,726.22.
The Dow fell 602.12 points, or 2.3%, to 25,387.18. Earlier in the day it was down as much as 648 points.
The Nasdaq composite slid 206.03 points, or 2.8%, to 7,200.87. The Russell 2000 index of smaller companies fell 30.70 points, or 2%, to 1,518.79.
Bond trading was closed for Veterans Day. Stocks in Europe also suffered losses.
Apple tumbled 5% to $194.17 after Wells Fargo analysts said the iPhone maker is the unnamed customer that optical communications company Lumentum Holdings said was significantly reducing orders. Lumentum shares plunged 33% to $37.50.
Several chipmakers also fell. Advanced Micro Devices dropped 9.5% to $19.03. Nvidia sank 7.8% to $189.54. Micron Technology slid 4.3% to $37.44.
Amazon declined 4.4% to $1,636.85.
Banks and other financial companies also took heavy losses. Goldman Sachs slid 7.5% to $206.05.
“Expectations are really that the deregulation process that has benefited banks up to this point is going to be slowed down with the Democrats in charge,” Bell said.
Stocks appeared to have regained their footing after a skid in October snapped a six-month string of gains for the S&P 500. Stocks rallied last week after the U.S. midterm elections turned out largely as investors expected, with a divided Congress promising legislative gridlock in Washington the next couple of years.
Although the market has typically thrived in periods of divided government, investors continue to grapple with uncertainty over the U.S.-China trade dispute and the potential effect of increased oversight of corporate America by Democrats, who will take over leadership in the House of Representatives in January.
In addition, some companies have recently reported third-quarter earnings and outlooks that have stoked investors' worries about the future growth of corporate profits.
Although companies got a boost this year from the lower tax rates put in place by President Trump and the GOP last December, several companies have recently warned about the effect of higher costs related to tariffs and rising interest rates.
“The bull market is not over, the economic expansion is not over, but things are starting to wind down,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “We're clearly getting into the late innings of the ballgame.”
British American Tobacco, which makes Newport cigarettes, plunged 8.8% to $38.08 on reports that regulators are considering a ban on menthol cigarettes.
PG&E tumbled 17.4% to $32.98 after the utility told regulators that a high-voltage line experienced a problem near the origin of one of the major California wildfires before the blaze started.
Athenahealth jumped 9.7% to $131.97 after the struggling maker of medical billing software said it received a $5.7-billion cash buyout offer.
About 90% of S&P 500 companies have reported third-quarter results so far, with some 51% of those posting earnings and revenue that topped Wall Street's forecasts, according to S&P Global Market Intelligence. Several big retailers are due to deliver results this week, including Walmart, Home Depot, Williams-Sonoma, Nordstrom and J.C. Penney.
“That could actually probably boost the market,” Bell said. “Retailers are going to have a better third quarter than most people expect. A lot of them ordered goods ahead of the tariffs going into place, so they're not going to have to pass on higher prices on to the consumer this holiday season.”
Benchmark U.S. crude gave up an early gain, sliding 0.4% to settle at $59.93 a barrel in New York. Brent crude, used to price international oils, slipped 0.1% to $70.12 a barrel in London. Oil futures rose earlier in the day on news that Saudi Arabia and other major producers planned to reduce output.
Heating oil fell 0.8% to $2.16 a gallon. Wholesale gasoline rose 0.9% to $1.64 a gallon. Natural gas rose 1.9% to $3.79 per 1,000 cubic feet.
The dollar strengthened to 113.86 yen from Friday’s 113.80 yen. The euro fell to $1.1240 from $1.1336. The British pound weakened to $1.2853 from $1.2975 amid concerns that Britain's government is struggling to find unity on a Brexit deal.
Gold fell 0.4% to $1,203.50 an ounce. Silver fell 0.9% to $14.01 an ounce. Copper fell 0.3% to $2.68 a pound.
Major stock indexes in Europe also ended lower Monday. In Asia, markets finished mixed.