WASHINGTON (dpa-AFX) - Stocks moved sharply lower during trading on Monday, extending the sell-off seen to close out the previous week. The major averages all showed significant declines, with the Nasdaq and the S&P 500 hitting three-month lows.
The major averages ended the day off their lows of the session but still firmly negative. The Nasdaq plunged 576.08 points or 3.4 percent to 16,200.08, the S&P 500 dove 160.23 points or 3.0 percent to 5,186.33 and the Dow tumbled 1,033.99 or 2.6 percent to 38,703.27.
The continued weakness on Wall Street came on the heels of an overseas sell-off, which saw Japan's Nikkei 225 Index record its biggest slump since 'Black Monday' in October 1987.
Concerns about the U.S. economy slipping into recession following last Friday's disappointing jobs report triggered the significant weakness in the overseas markets.
Shares of AI darling and market leader Nvidia (NVDA) plunged by 6.4 amid an unwinding of the artificial intelligence trade that recently helped the markets to record highs.
Tech giant Apple (AAPL) also tumbled by 4.8 percent after Warren Buffett's Berkshire Hathaway revealed it sold nearly half its stake in the iPhone maker.
Stocks regained some ground following the release of a report from the Institute for Supply Management showing service sector activity in the U.S. turned positive in the month of July.
The ISM said its services PMI climbed to 51.4 in July from 48.8 in June, with a reading above 50 indicating growth. Economists had expected the index to rise to 51.0.
'The uptick in the ISM services index will do little to reverse market jitters of a recession in the wake of Friday's employment report, but it aligns with our view of an economy in transition rather than one on the brink of collapse,' said Matthew Martin, U.S. Economist at Oxford Economics.
He added, 'Expectations for aggressive rate cuts in September are overdone, and we expect the Fed to move forward with a 25bps cut at the meeting.'
Sector News
Telecom stocks showed a substantial move to the downside on the day, dragging the NYSE Arca North American Telecom Index down by 4.2 percent.
Considerable weakness is also visible among airline stocks, as reflected by the 4.1 percent nosedive by the NYSE Arca Airline Index.
Networking stocks also saw significant weakness, with the NYSE Arca Networking Index plunging by 3.8 percent.
Tobacco, oil service and computer hardware stocks also moved notably lower amid continued broad based selling pressure on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan's Nikkei 225 Index saw a 12.4 percent nosedive, while South Korea's Kospi plunged by 8.8 percent.
The major European markets also showed significant moves to the downside. While the U.K.'s FTSE 100 Index tumbled by 2.0 percent, the German DAX Index and the French CAC 40 Index slumped by 1.8 percent and 1.4 percent, respectively.
In the bond market, treasuries surged early in the session but gave back ground to end the day roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 3.785 percent after hitting a low of 3.669 percent.
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