Stocks wipe out 2018 gains as FAANG stocks slide into a bear market

A
trader watches the screen at his terminal on the floor of the New
York Stock Exchange in New York October 15, 2014.
REUTERS/Lucas Jackson

• Stocks erased gains for the year Tuesday, dragged lower
  by the biggest technology companies.
• FAANG stocks entered a bear market, marking the first
  in seven years for Google parent Alphabet.
• Follow the US indexes in real
  time here.

Wall Street erased gains Tuesday
as high-flying technology companies plummeted into a bear market,
adding to fears about slowing growth and trade tensions.

The tech-heavy Nasdaq Composite
dropped about 2.5% in early trading, nearing a seven-month low,
while the S&P 500 shed 1.8%. The Dow Jones Industrial Average
tumbled more than 2%, or nearly 500 points.

“Last week saw a pullback
following a strong two-week period, as investors are displaying
confused behavior that is consistent with the market forming a
bottom,” said Mark Hackett, chief of investment research at
Nationwide. “We saw similar activity in the spring of the year.
This week will be interesting, as volume will likely be limited,
causing exaggerated moves.”

The so-called FANG stocks
—


Facebook

,


Amazon

,


Apple

,


Netflix

and
Google-parent company


Alphabet

— slipped
further after on Monday dipping into a bear market, down more
than 20% from June highs. Alphabet’s descent marked its first
bear market in seven years. The FANG Index was down about 3.3%
early Tuesday.

The Wall Street Journal reported Monday that the world’s
largest technology company slashed production orders in recent
weeks for all three of its new iPhones unveiled in
September.

Not helping the mood, Target
dropped more than 11% after reporting weaker-than-expected
quarterly earnings and same-store sales ahead of the holiday
season.

Other retailers —
including


Kohl’s

(-10.4%)
and

Macy’s

(-4.4%) — were sharply lower following the
results, bringing the SPDR S&P Retail ETF down about 2.4%.
Victoria’s Secret-parent company


L Brands

, which cut
its annual dividend in half a day earlier, shed nearly 15%

Best Buy

, on the other
hand, rose more than 2% after topping earnings, revenue and sales
estimates in the third quarter.

Chipmakers also continued to
drop, a day after

China accused

Samsung Electronics, SK Hynix and
US-based Micron Technology of competition violations.

Yields on the 10-year note were
slightly lower at 3.048%. The


dollar

jumped 0.3%
against a basket of currencies.

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