Technology shares took a nosedive Friday in a broad sell-off on Wall Street after the government reported stronger than expected US economic growth, fueling fears of an overheating economy.
The tech-heavy Nasdaq composite plunged 179.23 points (4.66 percent) to 3,662.99 while the Dow Jones industrials fell a more modest 74.96 points (0.71 percent) to 10,511.17.
The Standard and Poor's 500 index fell 29.73 points (2.05 percent) to close at 1,419.89.
On the bond market, the yield on the 10-year bond rose to 6.025 percent from 6.00 percent Thursday and on the 30-year bond to 5.776 percent against 5.768 percent. Bond yields and prices move in opposite directions.
The markets were roiled by the release of preliminary data that showed an annualized growth rate of 5.2 percent in the second quarter for the US economy, up from 4.8 percent in the first quarter.
"The economy is hardly rolling over and dying -- far from it. Reports of a slowdown in consumer spending are premature," said Bill Meehan, chief market strategist at Cantor Fitzgerald.
"This market continues to look weak on concerns of a potential rate hike at the Fed's August 22nd meeting," said Prudential Securities analyst Rich Woodworth.
The second-quarter GDP growth rate was much stronger than the consensus forecast by Wall Street economists of a 3.7 pct rise, and runs counter to the previous consensus that the economy was slowing in the second quarter.
Financial sector stocks were especially hard hit by the economic data and the prospect of higher interest rates, dealers said.
Shares in on-line advertising companies rose after a landmark agreement between the federal regulators and the online advertising firms, effectively allowing advertisers to self-regulate online profiling, led to a number of positive analyst comments - NEW YORK (AFP)
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