Tech stocks drop again as huge losses pile up on Wall Street

More misery for technology stocks pulled major indexes lower on Wall Street Friday, worsening what’s turning into the worst month for the market in a decade.

Amazon, Facebook, Netflix and a handful of other huge technology companies, once the best-performing stocks on the market, are now leading the way lower. Their huge popularity during the recent boom years in the market made them even more vulnerable when investors’ mood turned sour, as it has this fall.

Big drops in those stocks as well as Apple and Alphabet, Google‘s parent company, have contributed to what’s now a 20 percent drop in the Nasdaq from its peak in August. That index is heavily loaded with technology companies.

When the broader market was rising, those stocks rose even more. Now that the whole market is falling, these former favorites are now taking the worst of the losses.

“Technology was doing well on the way up because of momentum buying, and if you live by momentum, you die by momentum,” said Sam Stovall, chief investment strategist for CFRA.

Several big technology companies, notably Facebook and Twitter, have also suffered as a result of scandals over matters such as data privacy and election meddling, and traders worry that the companies will eventually face greater government regulation that could increase their costs and affect their profits.

Markets have suffered wide losses over the last week. The major U.S. indexes have fallen more than 11 percent in December, and without a substantial gain over the final days of trading, they are headed for their single worst month since October 2008, when the market was being battered by the global financial crisis.

Investors around the world have grown increasingly pessimistic about the global economy’s prospects over the next few years. It’s widely expected to slow down, but traders are concerned the cooling might be worse than they previously believed and that the U.S. could eventually tip into a recession.

After a sharp early gain, the S&P 500 index retreated 30 points, or 1.2 percent, to 2,437 at 2:38 p.m. Eastern time. The S&P 500, the benchmark for many index funds, has fallen 16.8 percent from its high in September.

The Dow Jones Industrial Average sank 233 points, or 1 percent, to 22,626. The Nasdaq skidded 142 points, or 2.2 percent, to 6,385. The Russell 2000 index of smaller-company stocks lost 26 points, or 2 percent, to 1,299.

Amazon fell 4.8 percent to $1,391 and Facebook gave up 4.6 percent to $127.30. Netflix declined 5.8 percent to $245.55 and Apple lost 2.5 percent to $152.91.

The market’s plunge comes even as the Federal Reserve projects that the U.S. economy will grow 3 percent this year, the fastest since 2005, and about 2.3 percent next year, and two years of further increases after that. But as interest rates rise and regions the U.S. does a lot of business with, like Europe and China, also slow down, those estimates might be harder to reach.

Trade tensions between the U.S. and China, the two largest economies in the world, are not the only reason for the expected slowdown in economic growth and corporate profits, but they are adding even more uncertainty to a picture that already looks cloudy.

The Federal Reserve raised interest rates earlier this week and signaled that it expects to raise them two more times next year. Investors aren’t sure how much that will impair the economy, and the stock market tumbled as they worried the Fed just wasn’t concerned about that possibility.

Defense contractors fell after President Donald Trump said he’s withdrawing U.S. soldiers from Syria in an unexpected move. Media reports say the administration might also pull large numbers of soldiers out of Afghanistan. Lockheed Martin fell 1.9 percent to $260.14 and Raytheon shed 2.6 percent to $153.78.

The market’s big losses this month are an outlier because December is generally the strongest time of the year for U.S. stocks. Traders often talk about a “Santa rally” that adds to the year’s gains as positions are closed out and people adjust their portfolios in anticipation of the year to come. Barring huge gains, this will be the worst December for the U.S. market since the 1930s.

Germany’s DAX rose 0.2 percent and the FTSE 100 in Britain added 0.1 percent. France’s CAC 40 was little changed. The Hang Seng index in Hong Kong rose 0.5 percent while South Korea’s Kospi inched up 0.1 percent. The Japanese Nikkei declined 1.1 percent.

All of those indexes have taken steep losses this year. The DAX, Hang Seng and Kospi have all plunged at least 20 percent since early January and the Nikkei is down 17 percent since early October.

Oil prices have declined 40 percent from recent highs amid concerns over a glut in the market and the slowing economy. U.S. crude oil slipped 0.6 percent to $45.59 a barrel in New York. Brent crude, the standard for international oil prices, fell 1.3 percent to $53.67 a barrel in London.

Wholesale gasoline was little changed at $1.32 a gallon. Heating oil fell 1 percent to $1.73 a gallon. Natural gas jumped 6.5 percent to $3.82 per 1,000 cubic feet.

Bond prices were mixed. The yield on the 2-year Treasury note fell to 2.63 percent from 2.65 percent. The yield on the 10-year Treasury note stayed at 2.79 percent.

Gold lost 0.8 percent to $1,258.10 an ounce and silver fell 1.1 percent to $14.70 an ounce. Copper lost 0.8 percent to $2.67 a pound.

The U.S. dollar also ticked higher after two days of sharp losses brought on by fears about the economy and slower increases in interest rates. The dollar rose 111.36 yen from 111.11 yen. The euro fell back to $1.1369 from $1.1469 and the British pound slipped to $1.2639 from $1.2671.

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Pan Pylas contributed to this story from London.