The stock market suffered a major setback today, led by substantial losses in the tech field. The dip amounted to the worst daily backslide seen in nearly eight months.
The Dow Jones Industrial Average sunk by more than 800 points, while the S&P lost around 94 points — or about 3.1 percent of its total. The NASDAQ similarly trended downwards, losing around 315 points total.
Even stocks which had over-performed over the past year saw significant losses on Wednesday. Tech stocks in particular took substantial hits to their value. Amazon, for example, lost 6.2 percent of its stock’s value on Wednesday, while Netflix lost about 8.4 percent of its value, according to the Chicago Tribune.
Why did tech stocks do significantly worse than others? It’s because these types of stocks tend to outperform — both positively and negatively — other stocks in the market, as Gina Martin Adams, chief equity strategist at Bloomberg Intelligence, explained.
“As stocks go up, tech goes up more than the stock market,” Adams said. “As stocks go down, tech goes down more than the stock market.”
Many analysts are blaming rising bond yields as the reason that the stock market did so poorly today, according to reporting from NBC 4 Washington. Analysts also warned that things could get worse before they get better.
BREAKING: US stocks drop over 831 points led by big tech companieshttps://t.co/9ezznYtyan— Fox News (@FoxNews) October 10, 2018
“People are getting out of the high-flying tech names right now,” Larry Benedict, CEO of The Opportunistic Trader, explained. “I think people are under-hedged; there could be more pain ahead.”
Other economists warned that the market needed to see substantial improvements in the tech field before an overall recovery could be seen as a certainty.
“The selling is a result of selling the best performing stocks this year and it is difficult to time when that selling pressure will slow,” said JC O’Hara, chief market technician at MKM Partners.
“Until we see some stabilization in that basket, we will continue to see weakness,” he added, according to reporting from CNBC.
But tech stocks weren’t the only ones to suffer on Wednesday. Sears, which has tried to close stores and other assets over recent years in efforts to reach profitability again, is reportedly seeking to file for bankruptcy, per previous reporting from the Inquisitr.
As a result of the announcement, Sears’s stocks dropped down to around $0.40 per share. To put that into comparison, those same stocks once traded at around $144 per share just ten years ago.
Sears is seeking what is commonly called a “debtor in possession” loan. Those types of loans serve to help businesses stay afloat while they go through the process of filing for bankruptcy.