The latest gyrations on Wall Street followed a wild stretch where the S&P 500 careened from its worst three-day slump since June to its best day in nearly three months.
The selling came as the odds lengthen that Congress will deliver more aid to the economy before November’s elections, support that many investors say is crucial after federal unemployment benefits and other stimulus expired. Partisan disagreements on Capitol Hill have kept Congress at a seeming impasse.
Nicholas Mapa, senior economist at ING, said risk aversion was dominating Asian trading with the technology sector weighing on overall sentiment.
“Investors are struggling to find a catalyst to reverse the recent downtrend with the much-anticipated U.S. fiscal stimulus bill still in limbo,” he said.
Tech stocks accounted for the biggest share of the broad selloff on Wall Street. The sector has been at the center of the market’s swings, hurt by criticism that their recession-defying surge in recent months was overdone.
The S&P 500 fell 1.8% to 3,339.19, its fourth decline in five days. The index is on pace for its second straight weekly loss. The Dow Jones Industrial Average dropped 1.5%, to 27,534.58. The Nasdaq gave up 2% to 10,919.59. The Russell 2000 index of smaller company stocks lost 1.2%, to 1,507.75.
