(Reuters) – US stocks slumped on Monday in a volatile session, while the S & P 500 index just finished its second correction in 2018. He was worried about new tensions between the US and China and a sharp slump in technology and Internet stocks.
Following a morning rally, the big US indices retreated after a Bloomberg report stating that the US agreed to announce tariffs on all remaining Chinese imports by the beginning of December, as talks between President Donald Trump and Xi Jinping stall next month.
"Obviously, this trade battle may be metastasizing to something worse than it already is," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
After falling more than 10 percent from its record high of 20 September during the reporting period, the benchmark index retreated late, closing the quarter at 9.9 percent. The Dow Industrials also fell more than 10 percent from their October 3 record during the session before bouncing 8.9 percent off the mark.
On Monday, the Dow Jones Industrial Average (DJI) fell 245.39 points or 0.99 percent to 24,442.92, the S & P 500.SPX lost 17.44 points or 0.66 percent to 2,641.25 and the Nasdaq Composite .IXIC fell 116.92 points, or 1.63 percent, to 7,050.29.
Key technology and growth assets such as Amazon.com Inc (AMZN.O), Google Parent Alphabet Inc (GOOGL.O) and Netflix Inc. (NFLX.O), recorded strong declines. The S & P 500 Technology Sector .SPLRCT fell 1.8 percent.
The so-called FANG growth stocks – Facebook (FB.O), Amazon, Netflix and Alphabet – have lost more than $ 200 billion in market value over the past two sessions.
FANGs fall on hard times – tmsnrt.rs/2P1lsab
The industrial sector .PLRCI, which is considered prone to trade issues, lost 1.7 percent, Boeing Co (BAN) tumble 6.6 percent.
"Concern for global growth and global trade … continues to create an overhang for US companies and global equities," said Chad Morganlander, Senior Portfolio Manager at Washington Crossing Advisors, Florham Park, New Jersey.
"Growth stocks typically tend poorly when global growth slows," he said. "They are pushing for a more defensive market until there is a clear signal that investors can take action."
Market volatility has risen in recent weeks due to higher interest rates in the US and concerns over high and low growth and tensions in the trade. Investors may also be increasingly concerned about the uncertainty surrounding US congressional elections, which are now only a week away.
"Probably the biggest headwind is concern over the midterm elections," said Kristina Hooper, global market strategist at Invesco. "This puts a strain on inventories, especially technology, as regulation raises concerns."
The British plan to tax revenues from online platforms may also have wounded Internet stocks.
In company news, shares of software maker Red Hat Inc (RHT.N.) rose 45.4 percent after the company agreed to be acquired by IBM Corp. (IBM.N) for $ 34 billion, but IBM shares fell 4.1 percent, weighing on the Dow and S & P.
Investors who are bullish on equities point to strong corporate earnings this year and economic growth, but there are also concerns over the extent of slowing earnings growth next year, while weak housing data has raised some concerns about consumers.
Monday's data showed that US consumer spending rose for the seventh consecutive month in September, but income, with moderate wage growth, had the lowest profit in more than a year, suggesting that the current pace of spending is unlikely to continue.
Diminishing problems outperformed the NYSE advancing by a 1.45-to-1 ratio; On the Nasdaq, a ratio of 1.45 to 1 favored the decline.
The S & P 500 recorded three new 52-week highs and 65 new lows; The Nasdaq Composite recorded 23 new highs and 260 new lows.
Approximately 9.3 billion shares changed hands on US exchanges, exceeding the daily average of 8.5 billion over the past 20 sessions.
Additional coverage by Caroline Valetkevitch and April Joyner in New York; Editing by Clive McKeef