New York, Feb 26 (Agency) Stocks on Wall Street plunged on Thursday, with technology index Nasdaq losing more than 3 percent for its biggest one-day decline since the end of October, as bond yields surged and players took profit on four straight months of gains. Nasdaq, which includes stocks of tech giants such as Facebook, Apple, Amazon, Netflix and Google, closed down 3.5 percent at 13,119. The index hit a record high of 14,175 last week.
Nasdaq fell came as the yield on US bonds’ benchmark ten-year note surged above the 1.5 percent, a development not seen since February 2020, before the outbreak of the coronavirus pandemic. Bond yields spiked as weekly US jobless claims fell to November lows. The better employment scenario raised expectations that the economy may rebound faster than thought from the COVID-19 pandemic, triggering investor rotation out of pricey stocks into undervalued companies that could benefit from a broader recovery. Nasdaq was the favorite target of sellers as it had run way ahead of the Dow Jones Industrial Average and the S&P 500. In Thursday’s session, stocks on the Dow and S&P500 appeared relatively more valuable than those on Nasdaq which exhibited grossly-inflated price-earnings ratios.
The Dow, the broadest gauge of the New York Stock Exchange, fell 1.8 percent to 31,402. The S&P 500, a barometer for the top 500 US stocks, closed down 2.5 percent at 3,829.