Technology giants suffer investor rout
Technology giants have suffered an investor rout that sent US stock markets falling heavily on Wednesday.
Shares in Facebook, Amazon, Apple, Netflix and Google’s parent company Alphabet – the so-called “FAANG” stocks that have driven US markets to all-time highs recently – all fell in New York trading.
The drop led a wider drop in US markets. The Dow Jones fell by more than 500 points, a drop of almost 2pc, while the wider S&P 500 index fell for a fifth day straight, its worst run in almost two years.
Rising government bond yields have made them more attractive, leading investors to pull money out of equities. The move particularly affects high-growth tech companies which have been a source of huge returns in recent months.
US 10-year Treasuries, a closely-watched indicator of bond yields, hit a seven year high of 3.26pc on Wednesday. Concerns about consumer spending have also led to jitters about US companies as they prepare to unveil results for the third quarter of the year over the coming weeks.
Netflix shares fell by 6pc and have now fallen by 12pc in the last five days. Amazon, Apple, Alphabet and Facebook all fell by between 2.3pc and 3.9pc. Snap, the parent company of the messaging app Snapchat, fell 4.8pc and sank to a new all-time low.