MARKET SNAPSHOT: U.S. Stocks Slide As Tech Shares Resume Their Selloff

Fed's more hawkish tone and latest D.C. development also in view

U.S. stocks fell on Thursday, hit as large-cap names in the technology sector resumed their recent slide, weighing on the overall market.

A more hawkish tone from the Federal Reserve also added to investor caution, as did reports that a special counsel had started to determine whether President Donald Trump attempted to obstruct justice, inserting a new bit of political uncertainty into markets.

The Dow Jones Industrial Average fell 0.3%, or 61 points, to 21,313. The blue-chip average had closed at a record on Wednesday. The S&P 500 lost 14 points to 2,424, a decline of 0.6%. The Nasdaq Composite Index sank 1% to 6,134, a drop of 60 points.

The outsize weakness in the Nasdaq was due to the index's heavy concentration of technology shares. The sector (XLK) fell 1.3%, extending its month-to-date decline to 2.5% as some of the group's biggest names--who had been fueling the overall market's year-to-date advance--slumped.

Facebook Inc. (FB) fell 1.5% on Thursday, while Google parent company Alphabet Inc(GOOGL) was off 1.7%. Among other big decliners, Inc.(AMZN) shed 1.3% and Apple Inc. (AAPL) was down 0.8%.

"These trades had all become very crowded, and they're unwinding now. Given how long they've been rising, and by how much, I think there's still a lot of room to go on the downside," said Aaron Clark, portfolio manager at GW&K Investment Management, which has about $32 billion in assets under management.

On Wednesday afternoon, Fed Chairwoman Janet Yellen and her colleagues raised a key U.S. interest rate ( and laid out a plan to shrink the central bank's massive $4.5 trillion balance sheet starting this year. The pair of moves reflect the Fed's view that a U.S. economic expansion now entering its ninth year no longer needs as much propping up.

Read:Inflation is right around the corner, Yellen insists (

The rate hike was fully expected, but "what wasn't expected was the slightly more hawkish tone to the Fed statement," said Kathleen Brooks, research director at City Index, in a note on Thursday.

"The Fed didn't mention anything about the delay to Washington's expected fiscal stimulus, which suggests that the Fed seems happy to push ahead with monetary policy normalization regardless of what the Trump administration is doing."

See:Yellen says she's 'sympathetic' to Trump's deregulation plan (

In the latest development out of Washington, the Washington Post and The Wall Street Journal reported that special counsel Robert Mueller is investigating Trump's conduct. The Journal said Trump's firing of former FBI Director James Comey is now a subject of Mueller's probe, which has expanded to include whether Trump obstructed justice. Trump, writing on Twitter, called it a "phony story."

"Gas is being thrown on the fire with these reports," Clark said. "I don't think this issue will derail the market, but flare-ups will cause volatility."

Clark even suggested that if things get worse for Trump, that could be a positive for the market. Wall Street "has already decided that 'President Pence' has a nice ring to it," he said, referring to the vice president. "Any news flow that increases the odds of impeachment or resignation has been taken in stride. The downside scenario isn't that bad, and could even be better."

Markets have risen since November's election, in large part on bets that Trump's economic agenda would accelerate economic growth and stoke corporate profits. However, various controversies with his administration have been seen as reducing the odds he can get those initiatives passed, something Clark speculated might be easier with a different president, particularly with the Republican Party controlling both houses of Congress.

Other markets:Oil futures ( fell 0.3%, extending sharp declines in the prior session, weighed down by data showing that the market remains awash in surplus oil. European stocks lost ground, while Asian markets closed with losses ( A key dollar index traded higher, as gold futures slumped 1.7%.

Individual movers: Shares in Kroger Co.(KR) plummeted 14% after the supermarket operator cut its full-year profit outlook (

Dow component Nike Inc. (NKE) fell 2.1% after it said it expects to cut 2% of its global workforce as part of a corporate restructuring (

Economic news: In the latest economic data, jobless claims fell by 8,000 in the latest week, with the monthly average in May falling to a 44-year bottom ( Separately, the Philadelphia Fed manufacturing index ( in June retreated to a reading of 27.6 from 38.8 in May, while the Empire State index rebounded to a reading of 19.8 from negative 1.

Industrial output was flat in May, slightly below expectations for a rise of 0.1% (

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(END) Dow Jones Newswires

June 15, 2017 09:57 ET (13:57 GMT)