New York Report: Slump in tech shares weighs on the Nasdaq

US STOCKS fell yesterday, with the S&P 500 posting its biggest three-day drop in two months, as investors bid down internet stocks and rotated into defensive names to protect against further declines.

Internet stocks were among the day’s biggest decliners with Amazon down 1.6 per cent and Yahoo off 3.5 per cent. The Global X Social Media ETF which includes Groupon and LinkedIn fell 2.5 per cent. The Nasdaq index posted its worst three-day decline since November 2011.

But the biotechnology sector, which saw sharp declines in the past several sessions, ended higher with the Nasdaq biotech sector index up 0.5 per cent at 2,367.94.

Selling pressure migrated to other sectors, with only defensives such as utilities and consumer staples in positive territory among the 10 major S&P sectors.

The Dow Jones industrial average fell 166.84 points or 1.02 per cent, to 16,245.87, the S&P 500 lost 20.05 points or 1.08 per cent, to 1,845.04 and the Nasdaq Composite dropped 47.973 points or 1.16 per cent, to 4,079.753.

Pfizer, down three per cent to $31.20, added pressure to the Dow and S&P 500. The company’s experimental breast cancer drug in a clinical trial nearly doubled the amount of time patients lived without their disease getting worse, but overall survival was not yet shown to be statistically significant.

The CBOE Volatility index Vix, often used to gauge investor sentiment on Wall Street, jumped 11.5 per cent to 15.56.

The index usually moves inversely to the S&P 500.