GLOBAL MARKETS-Stocks tumble on tech weakness, dollar gains

(Updates with close of European markets)
* Stocks fall on tech sell-off
* Dollar adds to gains, euro retreats to $1.18
* U.S. initial jobless claims rise less than expected

By Chuck Mikolajczak
NEW YORK, Sept 3 (Reuters) - A gauge of global stocks
tumbled on Thursday from a record high in its biggest one-day
decline in nearly three months as the technology sector sold
off, while the dollar continued its bounce from more than
two-year lows.
The S&P technology sector .SPLRCT , up more than 30% on the
year as the best-performing of the 11 major sectors, plunged
5.40% as investors looked for cheaper stocks in other areas. The
group contains some of the world's largest publicly traded
companies.
Investors have been concerned about the narrowing leadership
of the market rally that pushed the S&P 500 up 60% from its
March 23 low through Wednesday, with Wall Street gains largely
driven by names such as Apple Inc AAPL.O and Microsoft Corp
MSFT.O .
"We have a narrow market rally. Narrow markets beget
fragility. When the narrow-rallying names sell off the indexes
are going to sell off," said Brian Battle, director of trading
at Performance Trust Capital Partners in Chicago.
Signs the U.S. economy's rebound from coronavirus-driven
lockdowns could be stalling in the absence of another round of
fiscal stimulus also weighed.
While weekly initial jobless claims fell more than
anticipated, they remained extremely high. In addition, the
methodology used in the weekly report to address seasonal
fluctuations has changed, which analysts said led to fewer
claims than over the past two months. Investors will closely watch Friday's August employment
report for further signs of labor market stagnation.
Other data showed slower growth in the services sector last
month, as the boost from fiscal stimulus and business reopenings
faded, although it remained above the level signifying growth.
The Dow Jones Industrial Average .DJI fell 795.56 points,
or 2.73%, to 28,304.94, the S&P 500 .SPX lost 123.59 points,
or 3.45%, to 3,457.25 and the Nasdaq Composite .IXIC dropped
567.14 points, or 4.7%, to 11,489.30.
Chicago Federal Reserve President Charles Evans said on
Thursday that Congress needs to deliver more fiscal aid and
indicated U.S. monetary policy would be eased further and
interest rates kept at ultra-low levels for years to help the
economy recover its pre-pandemic strength. European shares closed 1.4% lower after rising more than
1.2% as weakness in tech names .SX8P spread, with the group
falling 3.76%% in its biggest one-day decline since April 21.
The pan-European STOXX 600 index .STOXX lost 1.40% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
2.47%. MSCI's index was on pace for its biggest one-day
percentage drop since June 11 after closing at a record high of
594.06 on Wednesday.
The dollar continued to bounce, but gave up some gains after
the weekly claims data, while the euro continued its recent
slide to dip as low as $1.1789 after climbing as high as $1.20
earlier in the week after the European Central bank expressed
concerns about its rapid rise.
The dollar index =USD rose 0.135%, with the euro EUR=
down 0.1% to $1.1841.
Benchmark 10-year U.S. Treasury notes US10YT=RR last rose
9/32 in price to yield 0.6234%, from 0.651% late on Wednesday.
Oil prices weakened, with both Brent and WTI crude hitting
one-month lows on worries about weaker U.S. gasoline demand and
a slowdown in the economic recovery. U.S. crude CLc1 recently fell 0.29% to $41.39 per barrel
and Brent LCOc1 was at $44.11, down 0.72% on the day.

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