Global shares trade lower as tech stocks plunge

Sharp drops hit Wall Street as technology stocks fell and bitcoin plunged again to roughly half its record price set last fall. Several discouraging reports on the US job market also knocked down yields in the bond market.

The S&P 500 fell 1.2 per cent for its sixth loss in the seven days since it set an all-time high. The Dow Jones Industrial Average dropped 592 points, or 1.2 per cent, and the Nasdaq composite sank 1.6 per cent.

All told, the S&P 500 fell 84.32 points to 6,798.40. The Dow Jones Industrial Average dropped 592.58 to 48,908.72, and the Nasdaq composite sank 363.99 to 22,540.59. In stock markets abroad, indexes fell across much of Europe and Asia. London’s FTSE 100 dropped 0.9 per cent after the Bank of England held interest rates there steady.

France’s CAC 40 fell 0.3 per cent, and Germany’s DAX lost 0.5 per cent after the European Central Bank likewise stood pat on interest rates. South Korea’s Kospi tumbled 3.9 per cent for one of the world’s biggest moves and dropped from its all-time high. Samsung Electronics fell 5.8 per cent, just two days after it had surged 11.4 per cent.

Qualcomm fell 8.5 per cent for one of the market’s bigger losses even though the chip company topped analysts’ expectations for profit and revenue in the latest quarter. Its forecast for profit in the current quarter fell short of analysts’ expectations as an industrywide shortage of memory pushes some handset makers to cut back on orders.

In the bond market, Treasury yields sank after a report said the number of US workers applying for unemployment benefits jumped last week by more than economists expected. That could be a signal that the pace of layoffs is accelerating. Some economists suggested last week’s rise could be statistical noise, and the total number remains relatively low compared with history.

But a separate report said that layoffs announced by US-based employers surged last month. The 1,08,435 was the highest number for a month since October, according to global outplacement and executive coaching firm Challenger, Gray & Christmas.

For a January, it’s the worst since 2009 during the Great Recession. A third report from the US government said that employers were advertising the lowest number of job openings in December in more than five years. Weakness in the job market could push the Federal Reserve to cut interest rates to support the economy, even if it also risks worsening inflation.

Treasury yields fell across the board in response. The yield on the 10-year Treasury sank to 4.19 per cent from 4.29 per cent late Wednesday. That’s a notable move for the bond market. The moves were even sharper in commodities markets.

Silver’s price dropped 9.1 per cent in its latest wild swing since its record-breaking momentum suddenly halted last week. Gold’s price fell 1.2 per cent to settle at $4,889.50 per ounce. It has been careening back and forth since roughly doubling in price over 12 months.

It neared $5,600 last week and then fell below $4,500 on Monday. Both gold and silver had been screaming higher as investors piled into places they thought would be safer amid worries about political turmoil, a US stock market that critics called expensive and huge debt loads for governments worldwide.

But nothing can keep rising at such extreme rates forever, and critics had been calling for a pullback. Bitcoin, which is pitched as “digital gold,” also sank.