Wall Street extends losses in broad selloff

February 8, 2016 03:18 PM

U.S. stocks added to losses in late Monday trading in a broad selloff that drove financial, tech, consumer and materials indexes down more than 3% amid persistent fears of a global slowdown.

The Nasdaq led losses for a second straight session, weighed down by Facebook, Amazon and other stocks that had lent strength to the market last year.

"When you see selling this broad and non-discriminant, when everything is being sold, it tends to end when it just exhausts everyone who’s worried," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey. 

Financial shares sank on worries over the U.S. economy and uncertainty whether the U.S. Federal Reserve will raise rates this year. The S&P financial index was down 3.5% and is off about 15% for the year, the worst-performing of the 10 major S&P sectors.

The losses followed a similar drop in European bank shares.

Goldman Sachs dropped 6.5%, set for its biggest drop in more than three years and weighing the most on the Dow.

At 2:40 p.m. the Dow Jones industrial average was down 377.41 points, or 2.33%, to 15,827.56, the S&P 500 had lost 49.09 points, or 2.61%, to 1,830.96 and the Nasdaq Composite  had dropped 144.92 points, or 3.32%, to 4,218.22.

Chesapeake Energy tumbled 35% to $1.97 after sources told Reuters that the natgas company had tapped existing adviser Kirkland & Ellis to explore restructuring options. Chesapeake said it has no plans to pursue a bankruptcy.

Microsoft, Amazon, Alphabet  and Facebook were down between 2.5% and 6%.

Cognizant dropped 8.9% to $53.32 after the IT services provider issued a weak sales forecast.

Investors have also been worried about the unraveling of rich valuations in a narrow group of stocks that led the market higher through most of 2015.

Declining issues outnumbered advancing ones on the NYSE by 2,708 to 393, for a 6.89-to-1 ratio on the downside; on the Nasdaq, 2,223 issues fell and 569 advanced for a 3.91-to-1 ratio favoring decliners.

The S&P 500 posted 5 new 52-week highs and 96 new lows; the Nasdaq recorded 3 new highs and 475 new lows.

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