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Tech stocks lead Wall Street lower again, Nasdaq falls 2.5% | Coronavirus

Technology companies led the sell-off on Wall Street on Thursday, which sent major indexes lower for the week.

The S&P 500 is down 1.4%, after giving up its early 0.4% gain. The benchmark index has been off two days of gains after daily losses since the first day of trading in 2022. The tech-heavy Nasdaq fell 2.5%. The Dow Jones Industrial Average was down 0.5%.

The sale came as investors weighed the company’s earnings reports and new data pointing to higher prices at the wholesale level. Inflation has been a major focus for investors as they try to gauge the impact of higher prices on businesses, consumers and the Federal Reserve’s policy on interest rates in 2022.

“Investors remain concerned that the worst we have yet to see in terms of inflation,” said Sam Stovall, chief investment analyst at CFRA.

The S&P 500 fell 67.32 points to 4,659.03, while the Dow Jones fell 176.70 points to 3,613.62. The Nasdaq lost 381.58 points to 14,806.81 points. All three indicators are on their way to another weekly loss.

Smaller company stocks also fell. The Russell 2000 Index fell 16.62 points, or 0.8%, to 2,159.44.

Bond yields mostly declined. The yield on the 10-year Treasury fell to 1.70% from 1.73% late Wednesday.

The Labor Department reported Thursday that the Producer Price Index, which measures prices at the wholesale level, rose by a record 9.7% in all of 2021. United States economy. The report comes on the heels of December consumer price data on Wednesday, which showed inflation jumped at its fastest pace in nearly 40 years last month.

“The PPI numbers came in a little better than expected, but they are still very high, and as a result they are worrying for investors,” Stovall said.

Wall Street is closely watching rising inflation to gauge its impact on businesses and consumers, as well as the Federal Reserve’s plan to scale back its support for the economy and markets. The central bank is limiting bond purchases that have helped keep interest rates low throughout the virus pandemic. Earlier this week, Federal Reserve Chairman Jerome Powell told Congress that the central bank was willing to raise interest rates to fight inflation.

Big tech stocks, which have a significant impact on the S&P 500 due to their high valuations, accounted for a large share of Thursday’s decline. The sector was falling in January as investors shifted their money in anticipation of higher interest rates, which tend to make expensive tech stocks less attractive.

Chip maker Nvidia fell 5.1 percent and software maker Adobe 2.9 percent.

“It’s a bit of a confusing narrative for the first two weeks of this year,” said Scott Ladner, chief investment officer at Horizon Investments. “The market is really starting to deal with selling really high-value, unprofitable tech names and finding other places to make money.”

He said that many large tech companies with strong revenues and profits, such as Apple and Microsoft, will suffer less than their peers with little revenue, but the outlook is rosy.

However, those big tech names fell out on Thursday. Apple shares fell 1.9 percent and Microsoft 4.2 percent.

Health care stocks, telecom services companies and a mix of companies that rely on direct consumer spending were among the losers. Pfizer is down 2%, Facebook’s Meta Platforms are down 2%, and Amazon shares are down 2.4%.

Industrial companies were among the few gainers. Delta Air Lines stock rose 2.1% after announcing surprisingly good financial results for the fourth quarter. Other airlines also got a boost. American Airlines shares rose 4.5 percent and United Airlines rose 3.5 percent.

Financial stocks were mixed ahead of Friday’s quarterly report cards from several major banks, including JPMorgan Chase and Citigroup.

Investors are also watching how the latest wave of COVID-19 cases is affecting the global economy. In Asia, the omicron variant has spread across Australia and is gaining ground in other countries despite high vaccination rates, mask requirements and strict border policies.

Japan reported more than 13,000 new infections on Wednesday, the highest level in four months. China, whose non-spreading coronavirus (COVID) policies are being challenged by the outbreak just weeks before the Beijing Winter Games, is testing entire cities and in some cases shutting them down.

Markets in Asia and Europe ended mixed.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

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