Investing.com – The Dow tumbled on Thursday, led by a plunge in tech stocks as fears over steeper U.S. rates and a slowdown in China prompted investors to abandon risk assets.
Investor concerns over frothy tech-stock valuations drew a sharp selloff in shares of Facebook (NASDAQ:FB), Netflix (NASDAQ:NFLX), Google-Parent Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL), deepening losses in the broader averages for the month.
Corporate earnings, though still in the early innings exacerbated the selloff as industrials slumped after several companies sounded the alarm bell on future profits, citing margins pressures owing to higher raw material and freight costs.
Sealed Air Corporation (NYSE:SEE) fell 8% after missed earnings estimates and slashed its profit outlook for the year. While Textron (NYSE:TXT) fell 11% after its quarterly earnings of $0.61 per share missed analysts' estimates of $0.76 a share.
Industrial heavyweight Caterpillar Inc (NYSE:CAT) fell about 4% after its earnings reports underlined the impact of a slowing Chinese economy in the wake of President Trump's tariffs.
U.S.-China trade relations were thrown into further disarray Thursday as National Economic Council Director Larry Kudlow slammed China's "unfair" trade practices and conceded that little progress had been made on trade talks.
"China has not responded positively to any of our asks," said Kudlow said at the Detroit Economic Club on Thursday.
The U.S. has slapped tariffs on $250 billion worth of Chinese goods, about half the value of US imports from the country. China has retaliated with tariffs on $110 billion worth of American exports.
Surging U.S. government bond United States 10-Year, meanwhile, which many have attributed for the recent selloff, gave up gains, lifting stocks from session lows.
The Federal Reserve's somewhat hawkish minutes released Wednesday, pointing to further increases in interest rates. Fed policymakers said that rates could even stretch beyond the neutral rate – one that neither holds back nor spurs economic growth.
In corporate news, Activision Blizzard Inc (NASDAQ:ATVI) shares slumped after it said its newest "Call of Duty" game had opening weekend sales of $500 million, matching that of last year, but below analysts' estimates for modest improvement.
In economic news, strong labor market and manufacturing data did little lift sentiment on equities.
The Philadelphia Fed said Thursday its manufacturing index fell to a reading of 22.2 in October, below 22.9 last month but above economists' estimates for 19.7.
The U.S. Department of Labor, meanwhile said initial jobless claims dropped by 5,000 to a seasonally adjusted 210,000 for the week ended Oct 13, beating economists’ forecast for a drop to 211,000.
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