Skip to content
Author
PUBLISHED: | UPDATED:

U.S. stocks fell, sending the Nasdaq Composite Index down the most in 11 months, as a selloff in semiconductors spread to the broader market.

A gauge of semiconductor stocks dropped the most since October amid analyst downgrades on suppliers to the personal-computer business. Intel, Apple and Microsoft were the biggest decliners in the Dow Jones Industrial Average. Kraft Foods soared 36 percent after Warren Buffett”s Berkshire Hathaway teamed with 3G Capital to acquire the company and merge it with H.J. Heinz.

The Nasdaq Composite lost 2.4 percent Wednedsay, the biggest drop since April 10. The Standard & Poor”s 500 Index fell 1.5 percent to 2,061.05, below its average price for the past 50 days. The Dow declined 292.60 points, or 1.6 percent, to 17,718.54, erasing its gain for the year. The Russell 2000 Index dropped 2.3 percent, its biggest retreat since Oct. 9.

“Some of the hot tech and biotech stocks — the higher- beta names — are taking a hit today,” Richard Sichel, chief investment officer at Philadelphia Trust, which oversees $2 billion, said in a phone interview. “There”s a little profit taking, which feeds on itself, especially within stocks that have jumped the most recently.”

The Philadelphia Stock Exchange Semiconductor Index dropped 4.6 percent, the most since October. Nvidia slid 6.1 percent, its biggest slump in more than three years, after an analyst from Pacific Crest Securities expressed caution over the company due to demand weakness for desktop computer processors and currency headwinds. Micron Technology, Broadcom and Intel declined at least 2.9 percent. Apple lost 2.6 percent.

Nine of the S&P 500”s 10 main groups fell Wednesday, led by a 2.7 percent decline in technology shares. The Chicago Board Options Exchange Volatility Index rose 13 percent to 15.44, the most in eight weeks. The gauge, know as the VIX, dropped 19 percent last week, the most since January. About 7 billion shares changed hands on U.S. exchanges today, 4.5 percent above the three-month average.

“Momentum stocks getting hit the hardest,” Randy Warren, who manages more than $100 million at Exton, Pennsylvania-based Warren Financial Service & Associates Inc., said in a phone interview. “It”s definitely more of a momentum tech selloff than anything else. There certainly seems to be some profit- taking going into quarter-end.”

Some of the first quarter”s best-performing stocks were among the day”s biggest decliners. Biogen and First Solar, which surged more than 35 percent in 2015 through last Friday”s trading, slipped more than 3.8 percent.

The iShares Nasdaq Biotechnology ETF, which increased 21 percent year-to-date through Friday, fell 4.1 percent. The fund has declined 6.9 percent over the last three trading sessions.

Technology companies Netflix and Salesforce.com. dropped more than 2.3 percent Wednesday after increasing at least 14 percent in 2015.

The S&P 500, the Dow and the Nasdaq Composite this week came within 1 percent of their records amid speculation the Federal Reserve won”t rush to raise rates. The Dow is down 0.6 percent in 2015, while the Nasdaq Composite is up 3 percent.

While the S&P 500 is among the worst-performing developed- market indexes this year, it is still on track for its ninth consecutive quarterly advance, with a 0.1 percent increase. That would be the longest winning streak since 1998. The gains pushed equity valuations to the highest in about six years.

Orders for durable goods unexpectedly dropped in February, a sign the slowdown in global growth may be weighing on American manufacturers.

Bookings for goods meant to last at least three years declined 1.4 percent after a 2 percent gain in January that was smaller than previously estimated. The median forecast of 81 economists surveyed by Bloomberg estimated durable goods orders would rise 0.2 percent.