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Dow loses 800 points as tech shares plummet

Dow loses 800 points as tech shares plummet
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Stocks dropped sharply Thursday, pushed downward by plunging share prices of major technology companies that had driven most of the stock market’s pre-pandemic rally and subsequent rebound. 

A day after the Dow Jones Industrial Average broke 29,000 for the first time since February and the S&P 500 and Nasdaq composite set new record highs, the Dow closed with a loss of 808 points, falling 2.8 percent on the day after losing more than 1,000 points shortly after noon.

The S&P 500 closed with a loss of 3.5 percent and the Nasdaq plummeted 5 percent

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Shares of Apple fell as much as 10.3 percent for its worst day since March. Shares of Tesla plunged as much as 10 percent while shares of Zoom fell as much 10.7 percent. Alphabet, Microsoft, Netflix and PayPal also all took heavy losses.

Stocks of companies that would stand to benefit from a coronavirus vaccine or rebound from the pandemic — including airlines, cruise lines and pharmaceutical companies — were among the only shares to rise during Thursday’s decline.

While notable in speed, the Thursday selloff wiped out mere days of gains for most of the largest tech companies. The stock market has rallied steadily since crashing in March, led primarily by tech companies that have either benefited from or have not been materially damaged by months of lockdowns and restricted activity.

"The S&P 500 rose 7% last month, its best August since 1986, and it kept the gains going in the first two days of September. Even with today’s drop, we’re still about 2% above the peak we reached in February and 3.5% from a record high," wrote Lindsey Bell, chief investment strategist for Ally Invest, in a Thursday analysis.

"The lack of a catalyst for today’s selloff makes us think this could just be a temporary mood swing. The Federal Reserve’s unwavering help and the chance for positive news on a coronavirus vaccine, the economy, or fiscal stimulus may help stocks bounce back."

Even so, the broader economy remains damaged and vulnerable to a deeper downturn amid a stalemate over further stimulus. The number of Americans receiving some form of unemployment aid rose by more than 2 million people in the week ending Aug. 15, and data has shown the pace of job gains slowing in August.

Updated at 4:40 p.m.