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Tech stock losses mount as U.S. indexes fall further

AP

U.S. stocks are lower for the third day in a row Monday as technology companies again take steep losses. Major indexes are coming off two weeks of declines, and a big jump in bond yields startled investors last week.

Stocks in Europe are falling after Italy’s new deputy prime minister said the government won’t deviate from its plan to increase spending. U.S. bond markets are closed for the Columbus Day holiday.

KEEPING SCORE: The S&P 500 index gave up 6 points, or 0.2 percent, to 2,879 as of 2:15 p.m. Eastern time. It fell 1.5 percent over the previous two weeks. The Dow Jones Industrial Average was unchanged at 26,448 after reversing an early loss of 223 points.

The Nasdaq composite lost 76 points, or 1 percent, to 7,711. The Russell 2000 index slid 8 points, or 0.5 percent, to 1,624. The Nasdaq and Russell are each coming off their worst week since late March.

Trading on Wall Street is lighter than usual because of Columbus Day. Low trading volume can sometimes lead to large swings in the market.

TECH STOPPED: Technology companies fell further. Salesforce fell 4.8 percent to $147.63 and Microsoft shed 1.3 percent to $110.63. Alphabet, Google’s parent company, fell 1.4 percent to $1,151 after it said the profiles of as many as 500,000 Google Plus accounts were exposed by a bug. The company said it is ending Google Plus for consumers.

Payment and credit card companies took especially sharp losses. PayPal retreated 3.9 percent to $79.90 and Mastercard fell 3 percent to $206.80.

EUROPE: Italy’s deputy prime minister vowed to press ahead with a plan to increase spending and the country’s deficit after the European Commission expressed “serious concern” about the notion. Five-Star leader Luigi Di Maio said Saturday “there is no plan B” to a proposal that will increase the deficit to 2.4 percent of annual gross domestic product next year.

Italy’s FTSE MIB dropped 2.4 percent and Italian bond prices dropped, sending yields higher. Germany’s DAX fell 1.4 percent and the CA 40 in France sank 1.1 percent. In Britain, the FTSE 100 fell 1.2 percent.

The euro sank to $1.1487 from $1.1525.

COLD STREAK: Amazon fell 1.9 percent to $1,852.50. On Sept. 4 the stock peaked at $2,050.50, which brought Amazon’s market value to a peak of $1 trillion during the day. But it quickly turned lower and has fallen 9 percent since then, its worst slump in six months. Still, the stock has climbed almost 60 percent this year.

BRAZIL BOUNCE: Brazil’s main stock index staged its biggest rally in two years, jumping 4 percent, and was on track for its highest close since May after far-right candidate Jair Bolsonaro led the first round of presidential voting by an unexpectedly wide margin. He’s now the favorite in the final election later this month.

Bolsonaro has repeatedly said he doesn’t understand the economy and has also spoken approvingly of Brazil’s 1964-1985 dictatorship. But business leaders and financial markets approved of Bolsonaro’s choice of an esteemed banker as head of his economic team and a fear of the left-leaning policies of the Workers’ Party.

BONDS: Bond markets were closed. The yield on the 10-year Treasury note, an important benchmark for mortgages and other types of long-term loans, jumped to 3.22 percent last week. That’s its highest in more than seven years and it’s given a boost to bank stocks.

High-dividend stocks rose Monday. Those stocks are often treated as an alternative to bonds because of their large payments to shareholders, which are similar to the yields from bonds.

Real estate investment trust Crown Castle International gained 1.7 percent to $110.54 and Coca-Cola climbed 1.3 percent to $46.48. The big increase in bond yields sent the stocks lower last week.

Banks also kept rising. Wells Fargo added 1.1 percent to $53.79.

ASIA: Beijing injected money into its cooling economy by reducing the level of reserves banks are required to hold, and its central bank told Chinese banks to lend more to entrepreneurs. Chinese leaders are trying to shore up economic growth that began to cool after Beijing tightened lending controls last year to rein in a debt boom. A tariff fight with U.S. President Donald Trump has added to downward pressure on growth.

Hong Kong’s Hang Seng retreated 1.4 percent and the Kospi in South Korea fell 0.6 percent. Japanese markets were closed for a holiday.

The dollar fell to ¥112.89 from ¥113.73 late Friday.

COMMODITIES: Benchmark U.S. crude slid 0.3 percent to $74.13 a barrel in New York and Brent crude, used to price international oils, dropped 0.5 percent to $83.70 a barrel in London.

Gold lost 1.4 percent to $1,188.60 an ounce and silver slipped 2.2 percent to $14.33 an ounce. Copper rose 0.1 percent to $2.77 a pound.