Stocks drop with tech's continued slide, US-China tensions

Wall Street is struggling again on Friday as big technology stocks continue to fall back to earth and as tensions ramp higher between the world’s largest economies.

The S&P 500 fell 0.9%, more than wiping out the last of its gains for the week. The Dow Jones Industrial Average was down 150 points, or 0.6%, at 26,502, as of 9:45 a.m. Eastern time, and the Nasdaq composite dropped 2%.

Stocks fell more sharply in Asian and European markets, and all the uncertainty helped gold top $1,900 per ounce, close to its record high. Treasury yields were holding relatively steady, but they remain close to their lowest levels since April.

The coronavirus pandemic remains the most dominant force in markets, with its potential to destroy lives and economies. But other risks are bubbling up, headlined recently by worsening relations between the United States and China.

China’s Foreign Ministry on Friday ordered the closure of the U.S. consulate in the western city of Chengdu. It echoes a similar move earlier this week by the United States to close the Chinese consulate in Houston.

Such moves have investors on edge because of how viciously markets swung in prior years when President Donald Trump was pressing his trade war with China, before they agreed to a temporary truce early this year.

Technology stocks have also been in the spotlight, after a sharp slide for them on Thursday helped drag the S&P 500 to its worst loss in nearly four weeks.

Microsoft, Apple, Amazon and other giants have cruised through much of the pandemic on expectations that they can keep growing despite all the challenges for the economy. But critics say enthusiasm for them was overdone, with prices too high even after accounting for the huge profits that they can produce

Intel sank 17% after it delayed the release of its new 7 nanometer chip, and it was the biggest weight on the market Friday morning.

Apple fell 2.6%, and Microsoft lost 2.2%, and tech stocks as a group accounted for about two thirds of the S&P 500’s loss.

Other high-flying tech-oriented giants also regressed. Amazon dropped 2.7%, Facebook lost 1.8% and the Class A shares of Google’s parent company fell 1.7%.

Earlier in the day, stocks in Shanghai sank 3.9%, while the Hang Seng in Hong Kong lost 2.2%. Elsewhere in Asia, South Korea’s Kospi fell 0.7%.

In Europe, France’s CAC 40 fell 1.2%, and Germany’s DAX lost 1.7%. The FTSE 100 in London droped 1.2%.

The yield on the 10-year Treasury ticked up to 0.59% from 0.58% late Thursday. It tends to move with investors’ expectations for the economy and inflation.

Gold rose 0.6% to $1,902.00 per ounce, crossing above that threshold for the first time in nearly nine years. Benchmark U.S. crude added 3 cents to $41.10 per barrel. Brent crude, the international standard, rose 9 cents to $43.40 per barrel.

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AP Business Writer Elaine Kurtenbach contributed.