Stock market today: Drops for Big Tech pull Wall Street lower as bitcoin touches all-time high

NEW YORK – U.S. stocks are falling further from their Tuesday records as Big Tech declines weigh on Wall Street.

The S&P 500 was down 1.1% in afternoon trading and was headed for a second consecutive decline after closing last week at a record high. The Dow Jones Industrial Average was down 378 points, or 1%, as of 2:04 p.m. ET, and the Nasdaq composite was down 1.8%.

Apple's 2.8% drop was one of the biggest weights on the market. It has been struggling over concerns about weak iPhone sales in China, where stiff competition and a shaky general economy They are challenging him.

Apple and some of the other Big Tech stocks that drove Wall Street to records have been struggling to meet the high expectations needed to justify their big price rises. Falls of 3.2% for Microsoft, 2.1% for Amazon and 3.6% for tesla They were also among the largest weightings in the S&P 500.

Accumulating technology stocks has become one of the most popular moves on Wall Street among both mutual funds and hedge funds, according to strategists at Barclays Capital. That can increase the risk of sharp declines later, when momentum breaks.

MicroStrategy fell 13.1% after saying it will raise $600 million in debt, which it will use to buy more bitcoin and for "general corporate purposes."

Bitcoin briefly rose above $69,000 on Tuesday, surpassing its record set in 2021, before retreating below $63,000. It has risen in part due to new exchange-traded funds that offer investors easier access to the cryptocurrency. It has approximately tripled in the last 12 months.

Aim was helping limit the market's losses after rising 12.7%. It reported a bigger rise in profits by the end of 2023 than analysts expected as it kept the lid on some expenses.

New York Community Bancorp was also rising, up 15.7%, a day after falling 23%. The bank is under pressure due to losses related to investments it has made in the commercial real estate sector. It is also under increased regulatory scrutiny due to its purchase of much of Signature Bank, one of the banks that fell in last year's mini-crisis for the industry.

Several analysts still say NYCB's problems are likely unique to that country, rather than a sign of an impending tsunami for banks in general, particularly after the US government's efforts last year to boost the industry. But if interest rates remain high, it could put more pressure on the entire industry.

Hopes for upcoming interest rate cuts got a boost when a morning report showed growth in the U.S. construction, health care and other services industries slowed last month more than investors expected. economists.

Perhaps most importantly for the market, the report also said prices paid by utilities rose at a slower pace in February than in January. Meanwhile, a separate report said orders to U.S. factories weakened more than expected in January.

Wall Street's hope has been that the economy will continue to advance, but not at a pace strong enough to maintain upward pressure on inflation. That's because traders want the Federal Reserve to cut interest rates this year, something it is tipped to do only if inflation cools decisively toward its 2% target.

Following Tuesday's reports, bets increased among traders that the Federal Reserve will begin cutting interest rates in June. The Federal Reserve's main rate is at its highest level since 2001 in hopes of reducing inflation. Any cuts would ease pressure on the economy and financial system.

Federal Reserve Chair Jerome Powell will testify before Congress later this week, which could further influence expectations for when rate cuts could begin.

In the bond market, the 10-year Treasury yield fell to 4.14% from 4.22% late Monday.

In overseas stock markets, Hong Kong's Hang Seng Index sank 2.6% after China's prime minister said the country's economic goal growth this year is around 5%, in line with expectations. .

Li Qiang, in his opening speech to China's National People's Congress, also said Beijing would issue 1 trillion yuan ($139 billion) in long-term bonds to help close financing gaps, provide support for local governments with financial problems and invest in both advanced technology and social support and education.

But the government's intention to keep its deficit at 3% of the size of the overall Chinese economy may have disappointed investors hoping for more aggressive action.

Shares in Shanghai rose 0.3%, while indexes fell modestly in much of the rest of the world.

AP Business writers Elaine Kurtenbach and Matt Ott contributed.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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