Nasdaq sinks by more than 3pc, Dow plunges by 558 points

Tuesday, September 08, 2020

Stocks fell sharply Tuesday on Wall Street to start the week as technology shares were under pressure following their worst sell-off in more than five months last week, CNBC reports.

The Nasdaq Composite dropped by 3.7 percent and the Dow Jones Industrial Average plunged by 558 points, or more than 2 percent. The S&P 500 slid by 2.5 percent.

“High valuations in the mega-cap stocks are stretched far beyond historical levels,” said Bruce Bittles, chief investment strategist at Baird. “The technical indicators – high margin debt, fully invested mutual funds, CBOE options data showing record call volume, Wall Street letter writers at bullish levels -- pointed to excessive optimism in the market which often suggests a consolidation/correction phase is likely.”

On Friday, stocks snapped a five-week winning streak after a big reversal in major technology stocks.