Wall Street tumbles as investors take the knife to tech companies

The Dow tumbles more than 400 points

The retreat on Wall Street was led by technology stocks, which dropped 2.33 percent, and the trade-sensitive industrial stocks that fell 2.22 percent.

After a long stretch of relative calm, the stock market has suffered sharp losses over the last week as bond yields surged. The benchmark index fell for the fifth straight day, which hadn't happened since just before the 2016 presidential election. Jeweler Tiffany, handbag makers Michael Kors and Tapestry tumbled between 4.9 and 7.2 percent.

At the closing bell, the Dow Jones Industrial Average had lost 3.1% or 830 points to finish at 25,613.35, in the biggest fall since February. Nasdaq composite, which has a high concentration of technology stocks, tumbled 244 points, or 3.2 per cent, to 7,495.

For example, a yield rise in a month of one standard deviation or less, which would be 20 basis points now, is manageable for stocks, Goldman said in a note last week.

The tumble came after the Dow Jones industrial average closed 831.83 points lower, its third-worst point decline ever, in NY trading on Wednesday amid concerns over a rise in interest rates.

At the time of this writing, Bitcoin had dropped 4 percent to $6,294, while Ethereum and EOS dived over 10 and 8 percent, respectively, according to the data on CoinGecko. Amazon skidded 4.8 percent to $1,781.21.

Canadian stocks also fell on Thursday, weighed down by a more than 2-per-cent drop in healthcare and energy stocks amid a broad based sell-off in global equities.

Bear markets since 1975 have had far lower percentage drops at their bottom, even as markets have grown remarkably in inflation-adjusted dollars. Berkshire Hathaway dipped 4.1 per cent to $214.64 and reinsurer Everest Re slid 4.6 per cent to $218.97. There have recently been several indications that the USA housing market has cooled, likely in part due to higher rates on mortgages. But eventually the high rates worry stock investors, as higher rates tend to increase borrowing costs and cut into profit margins.

The 2-year yield hit its highest level since 2008.

The move particularly affects high-growth tech companies which have been a source of huge returns in recent months.

Gina Martin Adams, chief equity strategist for Bloomberg Intelligence, said the stocks have become more volatile in the last few months because investors have concerns about their future profitability.

"Amazon recently announced they were increasing wages, Facebook is spending a ton on security", she said. Also, because the market is open 24/7, unlike the Dow Jones, S&P 500 and Nasdaq.

Sears Holdings nosedived after the Wall Street Journal reported that the struggling retailer hired an advisory firm to prepare a bankruptcy filing that could come within days. In the previous session, the stock jumped 15 per cent on a Globe and Mail report that Altria Group was in talks for acquiring a stake.

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