NEW YORK — The high-flyers are laying the stock market low — once again. ADVERTISING NEW YORK — The high-flyers are laying the stock market low — once again. Investors turned against biotech, Internet and other once-soaring stocks on Thursday,
NEW YORK — The high-flyers are laying the stock market low — once again.
Investors turned against biotech, Internet and other once-soaring stocks on Thursday, driving the Nasdaq composite index to its worst day since 2011.
The sell-off in tech names dragged down the broader market and left all the major U.S. indexes in the red for the year.
Steep declines in tech, followed by rebounds, have become a familiar pattern in the stock market in recent weeks. After falling Monday, the Nasdaq and other major index rallied over the next two days. On Thursday, stocks dropped again, led once more by biotech and technology companies.
The slide represents a shift in investor psychology. After chasing their huge gains in 2013, investors are worried that stocks like Facebook and Gilead Sciences, which doubled last year, have become too expensive.
And it’s not just lofty prices that have made those sectors volatile in recent weeks. Regulators are scrutinizing the cost of cutting-edge biotech drugs. Worried investors are shifting from riskier investments to safer areas such as utilities, health care and consumer staples.
On Thursday, the Nasdaq composite index fell 3 percent, its worst drop since November 2011.
Few companies escaped the downdraft. Of the Nasdaq’s 100 largest stocks, only one, C.H. Robinson Worldwide, a freight company, ended higher.
Several factors likely combined to send stocks lower, said Randy Frederick, managing director of trading and derivatives at Schwab Center for Financial Research.
Frederick said that recent IPOs, many of them tech and biotech companies, have become overheated. At the same time, the market hasn’t had a 10 percent decline since the spring of 2012, only smaller dips in the 4 percent and 5 percent range.
“We’ve been due,” Frederick said. “We haven’t really had a good catalyst for one, but the quarter’s over, we have an earnings season, we have some stocks that are a little overheated, there’s just a lot of small negatives that are sort of piling together and creating this confluence of anxiety.”
The Nasdaq ended the day down 129.79 points to 4,054.11. It is now down 7 percent from its recent high reached March 5. Other major index also fell, but not as much.
The Standard &Poor’s 500 indexes dropped 39.10 points to close at 1,838.08. It is now down 2.09 percent for the year, although it still remains close to its all-time reached April 2. The Dow Jones industrial average lost 266.96 points to 16,170.22. It is off 1.6 percent for 2014.
Gilead Sciences slid $5.17, or 7 percent, to $65.48 on Thursday. Biogen Idec dropped $13.33, or 4 percent, to $287.35.
Frederick said it made sense that former high-flyers like biotech would have the biggest drops “because that’s where the risk money is, and when people get a little spooked, they’re going to pull out of that.”
