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Sudden technology tumble continues as stocks fall further

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    Traders Tommy Kalikas, left, and Patrick Casey work on the floor of the New York Stock Exchange.

NEW YORK >> U.S. stock indexes slipped again Monday as technology companies, which were near record highs last week, suffered a second day of sharp losses. Investors are changing course and selling some of the best-performing stocks of the year while buying companies that have struggled.

Technology companies have surged in recent months, and on Monday almost all of the losses came from the big companies that have led the way recently: Apple, Microsoft, Facebook, and Alphabet, Google’s parent company. Stocks fell hard in early trading, but gradually recovered part of their losses as the day went on.

Julian Emanuel, an equity strategist for UBS, thinks technology stocks may fall a lot further and wind up 10 percent lower than they were last week. He said the technology companies should continue to do well, but the stocks have done so much better than the rest of the market in recent months that they are due for a downturn.

“Any time that you have that degree of extreme sector outperformance, two things happen: the overall market tends to get a bit more volatile, and the leading group tends to underperform the laggards,” he said.

Investors took a new look at some groups of companies that haven’t done that well in 2017, including energy, telecommunications and real estate companies. Some of the best-performing stocks fell, including consumer-focused companies, health care companies, utilities and basic materials makers.

The Standard & Poor’s 500 index dipped 2.38 points, or 0.1 percent, to 2,429.39. The Dow Jones industrial average, which closed at a record high Friday, lost 36.30 points, or 0.2 percent, to 21,235.67. The Nasdaq composite dropped 32.45 points, or 0.5 percent, to 6,175.46. The Russell 2000 index of small-company stocks slid 2.50 points, or 0.2 percent, to 1,419.21.

Apple shed $3.66, or 2.5 percent, to $145.32 while Alphabet lost $8.31 to $961.81. Facebook fell $1.16 to $148.44 while Microsoft sank 54 cents to $69.78. Other 2017 top performers like Activision Blizzard, Netflix and Skyworks Solutions also tumbled.

Technology stocks have done far better than the rest of the market this year and were close to all-time highs before Friday’s drop. The technology component of the S&P 500 index shed 2.7 percent Friday, which erased a month’s worth of gains.

General Electric, meanwhile, made its biggest gain in almost two years after it said CEO Jeffrey Immelt will step down after 16 years at the helm. John Flannery, the head of GE’s health care division, will take over the post in August. Immelt will remain GE’s chairman until the end of this year. In recent years GE has sold or split off numerous businesses, including its financial services division, and focused on new technologies as it returned to its roots as an industrial company.

GE stock gained $1, or 3.6 percent, to $28.94, for its largest one-day jump since October 2015.

Benchmark U.S. crude added 25 cents to $46.08 a barrel in New York. Brent crude, used to price international oils, added 14 cents to $48.29 a barrel in London. Among energy companies, Exxon Mobil rose 80 cents, or 1 percent, to $82.93 and Chevron picked up $1.64, or 1.5 percent, to $108.04.

Energy companies are down 12 percent this year and phone companies have fallen almost 9 percent, but both climbed Monday as investors bought stocks that have struggled this year. Verizon added 47 cents, or 1 percent, to $47.19. Real estate companies have lagged the market this year, and they rose as well.

Stocks that took a rare downturn included Amazon, which dropped $13.48, or 1.4 percent, to $964.83, and drug and medical device maker Baxter International, which lost $1.76, or 3 percent, to $57.15.

The Federal Reserve will meet Tuesday and Wednesday, and investors expect the central bank to raise interest rates for the third time since December.

Emanuel, of UBS, said that if the Fed takes an upbeat view of the economy, investors will likely keep selling technology stocks and put their money into consumer-focused companies, banks, and other industries that should benefit from continued economic growth. But if the Fed is more pessimistic, investors may look for yield and safer investments and buy bonds and high-dividend stocks instead.

Bond prices wobbled and turned lower. The yield on the 10-year Treasury note rose to 2.21 percent from 2.20 percent.

In other energy trading, wholesale gasoline dipped 1 cent to $1.49 a gallon. Heating oil lost less than 1 cent to $1.43 a gallon. Natural gas fell 2 cents to $3.02 per 1,000 cubic feet.

The dollar fell to 109.79 yen from 110.20 yen. The euro inched up to $1.1208 from $1.1195. The British pound continued to fall. It slid to $1.2657 from $1.12724 following the U.K.’s general election, which left the Conservative party with a weaker hold on the government that could affect the country’s bargaining position in its exit talks with the European Union.

Gold slipped $2.50 to $1,268.90 an ounce. Silver sank 28 cents to $16.94 an ounce. Copper lost 3 cents to $2.62 a pound.

European stocks also stumbled. France’s CAC 40 dropped 1.1 percent and the Germany DAX shed 1 percent. Britain’s FTSE 100 lost 0.2 percent. The benchmark Nikkei 225 in Japan slipped 0.5 percent and South Korea’s Kospi declined 1 percent. The Hang Seng of Hong Kong lost 1.3 percent.

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