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* Tesla tumbles after exclusion from S&P 500
* GM jumps after taking stake in electric-truck maker Nikola
* Sell-off in Amazon, Apple, other big tech stocks resumes
(Updates to market close)
By Chuck Mikolajczak
NEW YORK, Sept 8 (Reuters) - U.S. stocks closed lower for a
third straight session on Tuesday as heavyweight technology
names extended their sell-off, while Tesla suffered its biggest
daily percentage drop after the stock was passed over for
inclusion in the S&P 500.
Each of the 11 major S&P sectors were lower, led by declines
in technology .SPLRCT and energy .SPNY . Reports on Friday
that SoftBank 9984.T made significant option purchases during
the run-up in U.S. stocks added to investor nervousness.
Technology once again dragged indexes lower with a drop of
more than 3%, the third straight decline and worst three-day
performance for the sector since mid-March. Even with the recent
drop, the sector remains the best performer on the year.
"Things got expensive, they ran up, they got very
concentrated and people got really giddy," said Willie Delwiche,
investment strategist at Baird in Milwaukee. "Everyone is all
loaded up on one side, it doesn't take much of a ripple to knock
some apples off the cart."
Unofficially, the Dow Jones Industrial Average .DJI fell
631.89 points, or 2.25%, to 27,501.42, the S&P 500 .SPX lost
95.11 points, or 2.78%, to 3,331.85 and the Nasdaq Composite
.IXIC dropped 465.44 points, or 4.11%, to 10,847.69.
Energy shares slumped as oil prices fell below $40 a barrel.
Media reports of SoftBank's option purchases also reminded
investors that market makers might have billions of dollars'
worth of long positions as hedges against options trades.
Wall Street's rally, which has been fueled in large part by
massive amounts of monetary and fiscal stimulus, screeched to a
halt last week with the Nasdaq falling as much as 9.9% from its
intraday record as investors booked profits after a run that
lifted the index about 70% from its pandemic lows.
At session lows on Tuesday, Facebook FB.O , Amazon.com
AMZN.O , Apple AAPL.O , Tesla TSLA.O , Microsoft MSFT.O ,
Alphabet GOOGL.O and Netflix NFLX.O had collectively lost
more than $1 trillion in market capitalization since Sept. 2.
Tesla plunged to suffer its biggest daily percentage drop as
the electric-car maker was excluded from a group of companies
being added to the S&P 500. Investors had widely expected its
inclusion after a blockbuster quarterly earnings report in July.
Up to Friday's close, the stock had surged about 400% this year.
JPMorgan Chase & Co JPM.N fell after a report it was
probing employees who were allegedly involved in the misuse of
funds intended for COVID-19 relief. The wider banks index
.SPXBK lost 3.0%, also tracking Treasury yields. US/
Value-linked stocks .IVX fell, but outperformed the
broader market and a decline in the growth index .IGX . Wall
Street's fear gauge .VIX climbed for the third time in four
sessions.
Concerns over potential U.S. sanctions against China's
biggest chipmaker, SMIC 0981.HK , hit domestic suppliers, with
the PHLX semiconductor index .SOX down 3.43%.
General Motors Co GM.N jumped after it acquired an 11%
stake worth $2 billion in U.S. electric-truck maker Nikola Corp
NKLA.O . The truck maker's shares surged.