US STOCKS-Wall St tumbles on tech selloff, recovery worries

By Medha Singh and Devik Jain. Sept 3- Wall Street’s main indexes tumbled on Thursday, heading for their worst day since June as investors dumped high-flying technology-focused stocks, while economic data highlighted concerns about a long and difficult recovery. Shares of Facebook Inc, Apple Inc, Inc, Microsoft Inc and Google-parent Alphabet Inc…

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* VIX jumps to a seven-week high

* Weekly jobless claims slip below 1 mln

* Tesla drops for the third straight day

* Indexes fall: Dow 2.38%, S&P 3.20%, Nasdaq 4.67%(Updates to early afternoon)

By Medha Singh and Devik Jain

Sept 3 (Reuters) – Wall Street’s main indexes tumbled onThursday, heading for their worst day since June as investorsdumped high-flying technology-focused stocks, while economicdata highlighted concerns about a long and difficult recovery.

Shares of Facebook Inc, Apple Inc, Inc, Microsoft Inc andGoogle-parent Alphabet Inc sank between 4.9% and 7%.

The five stocks, deemed stay-at-home winners during thecoronavirus crisis, account for nearly a quarter of the S&P500’s market capitalization and have driven the stock market’snarrow technology-led recovery from the pandemic lows hit inMarch.

The NYSE FANG+TM Index, which includes the coreFAANG stocks, shed 5.5%, putting it on track for its biggestone-day decline since March 16.

The Philadelphia chip index and the S&P tech sectoralso dropped about 5% each, with investors alsobooking profits ahead of the Labor Day long weekend.

“Some of the stocks have gotten a little pricey, and whatthe actual cause is to spark this selloff is difficult to say,”said Randy Frederick, vice-president of trading and derivativesfor Charles Schwab in Austin.

“The leading sector for quite a long time has been theNasdaq, which is very heavily weighted in technology stocks sopeople just saw this as an opportunity to take the profits offthe table.”

The pullback in stocks comes a day after the S&P 500 and theNasdaq closed at record levels and the Dow came within 1.5% ofits February peak, powered by unprecedented fiscal and monetarysupport.

Earlier in the day, data showed the number of Americansfiling new claims for unemployment benefits fell more thanexpected last week, but remained extraordinarily high. Theclosely watched monthly payrolls report is set forFriday

Separately, a survey showed U.S. services industry growthslowed in August, likely as the boost from the reopening ofbusinesses and fiscal stimulus faded.

Wall Street’s fear gauge crossed its 200-day movingaverage to hit its highest level in seven weeks.

At 12:44 p.m. ET, the Dow Jones Industrial Averagewas down 692.33 points, or 2.38%, at 28,408.17, the S&P 500was down 114.67 points, or 3.20%, at 3,466.17. The NasdaqComposite was down 563.63 points, or 4.67%, at11,492.81.

“The prevalent attitude in the market now is that this is ahealthy correction,” said Mike Zigmont, head of trading andresearch at Harvest Volatility Management in New York.

“(Investors) are in love with tech stocks and it’s going totake more than this for them to fall out of love with them.”

Tesla Inc tumbled 8%, falling for the thirdstraight session.

PVH Corp rose 4.5% after the Calvin Klein ownerposted a surprise quarterly profit, boosted by strong onlinedemand for comfortable and casual clothing during thecoronavirus-led shift to work from home.

Declining issues outnumbered advancers for a 3.25-to-1 ratioon the NYSE and for a 3.76-to-1 ratio on the Nasdaq.

The S&P index recorded 18 new 52-week highs and no new low,while the Nasdaq recorded 23 new highs and 45 new lows.(Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur,Sriraj Kalluvila and Maju Samuel)