Tech stocks hit as markets dive

NEW YORK - Technology stocks took a beating Thursday, with the Nasdaq composite index suffering its biggest drop since late 2011.

The tech-heavy index fell 130 points, or 3.1 percent, to 4,054. The Dow Jones industrial average plunged 267 points, or 1.6 percent, to 16,170, while the Standard & Poor's 500 also lost ground. Small-company stocks also declined as investors reduced their exposure to riskier parts of the market. The Russell 2000 fell 29 points, or 2.5 percent.

The biotechnology sector led stock indexes down Thursday, as Biogen Idec, Gilead Sciences and other biotech companies extended a recent slump. EBay fell after Carl Icahn abandoned an effort to shake up the company and Bed Bath & Beyond fell after reporting weak sales figures.

Biotech stocks have gone from investor favorites to pariahs. After making big gains last year, biotechs have been crushed in recent weeks as they come under pressure to lower prices for their drugs. Biogen dropped $12.61, or 4 percent, to $287.91 and Gilead slid $4.73, or 7 percent, to $65.92. Both roughly doubled in value last year.

Other recent favorites also took a drubbing. Facebook, another stock that doubled last year, sank $3, or 5 percent, to $59.41.

The market's drop wiped out gains made earlier in the week. On Wednesday, minutes from the Federal Reserve's latest meeting reassured investors that the central bank wasn't in a hurry to raise interest rates. The S&P 500 had its best day in a month.

"I look at this and I think the market is looking for a reason to go higher," said Brad McMillan, Chief Investment Officer for Commonwealth Financial. "Every time it seems to have one, the next day it goes, 'Nah, not good enough.' "

The sharp sell-off came amid some positive news for the job market.

The Labor Department said that the number of people applying for U.S. unemployment benefits dropped to 300,000, the lowest level in nearly seven years. The less-volatile four-week average dropped, too. Fewer Americans sought unemployment benefits last week than at any point since the Great Recession started in December 2007.

"What today's ... unemployment claims number tells us is that current labor market conditions are normal," Chris Rupkey, chief financial economist at the Bank of Tokyo, wrote in a note to clients. "The outlook for the labor market is assured. The economy does not need additional stimulus."

In government bond trading, the yield on the 10-year Treasury note dipped to 2.63 percent from 2.69 percent late Wednesday. The price of crude oil fell 20 cents to close at $103.40 a barrel. Gold climbed $14.60 to settle at $1,320.50 an ounce.

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