Asia shares extend losses after rout on Wall Street

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A man walks past an electronic stock board showing Japan's Nikkei 225 index at a securities firm Thursday, Oct. 25, 2018 in Tokyo. Shares fell moderately in Asia on Thursday after another torrent of selling gripped Wall Street overnight, sending the Dow Jones Industrial Average plummeting more than 600 points and erasing its gains for the year. Japan’s Nikkei 225 index sank sharply on the open but leveled off, regaining some lost ground. (AP Photo/Eugene Hoshiko)

Asian shares skidded Thursday after another torrent of selling on Wall Street sent the Dow Jones Industrial Average plummeting more than 600 points, erasing its gains for the year.

Japan's Nikkei 225 index sank sharply on the open. By early afternoon it was down 3.3 percent at 21,369.48. The Shanghai Composite index slipped 1.4 percent to 2,566.21 and Hong Kong's Hang Seng index skidded 1.8 percent to 24,794.60.

"If people are struggling to find a driver I suggest, they wake up and smell the coffee," Stephen Innes of OANDA said in a commentary.

"With the worrisome prospect of U.S. tax cuts having a much shorter shelf life than expected and with the asynchronous global growth sinkhole expanding, equities will have no place to go except into the tank taking global risk sentiment along with it," he said.

Charts for the entire region were awash in red, but the declines were mostly in the 2 percent to 3 percent range.

Elsewhere in Asia, South Korea's Kospi fell 2 percent to 2,053.75 and the S&P ASX/200 dropped 2.2 percent to 5,701.80. India's Sensex fell 0.7 percent to 33,781.56.

In Hong Kong, airline Cathay Pacific's shares dropped as much as 6.5 percent after it said it had discovered a data breach affecting 9.4 million passengers.

Some market observers appeared to be taking the latest volatility in stride.

"I think the Hong Kong market is really very close to bottom, because when you look at the value, it's very extremely cheap. So how low can it get? Maybe it will reach 24,000 before we find the bottom," said analyst Francis Lun of Geo Securities.

New York trading overnight saw the Nasdaq composite with its hefty roster of tech stocks bear the brunt of the sell-off. It has now fallen more than 10 percent below its August peak in what Wall Street calls a "correction," losing 4.4 percent on Wednesday to 7,108.40. That was its biggest drop since August 2011 but it is still up 3 percent for the year.

The S&P 500 lost 3.1 percent to 2,656.10 and has lost about 9.4 percent from its Sept. 20 peak. The Dow tumbled 2.4 percent to 24,583.42. The Russell 2000 index of smaller-company stocks gave up 3.8 percent to 1,468.70 and is down 4.4 percent for the year.

Disappointing quarterly results and outlooks are stoking investors' jitters over future growth in corporate profits. Bond prices rose, sending yields lower as traders sought safe-haven investments.

"Investors are on pins and needles," said Erik Davidson, chief investment officer at Wells Fargo Private Bank. "There has definitely been a change in sentiment for investors starting with the volatility we had last week. The sentiment and the outlook seems to be turning more negative, or at the very least, less rosy."

Investors are increasingly concerned that corporate America's tax cut-fueled earnings growth this year will fade in coming months amid rising inflation, uncertainty over the escalating trade conflict between the U.S. and China and the likelihood of higher interest rates. Recent signs that the housing market is cooling are fueling speculation that U.S. economic growth will start to slow next year.

Bond prices rose, sending the yield on the 10-year Treasury note down to 3.12 percent from 3.16 percent late Tuesday. The slide in bond yields came as traders sought out lower-risk assets.

Technology stocks and media and communications companies accounted for much of the selling. Banks, health care and industrial companies also took heavy losses, outweighing gains by utilities and other high-dividend stocks.

Most companies that missed earnings expectations or issued cautionary outlooks were punished.

AT&T sank after reporting weak subscriber numbers, and chipmaker Texas Instruments fell 8.2 percent after reporting slumping demand.

Shares in iRobot plunged 12.3 percent to $80.49 after the robotics technology company said tariffs will reduce its profitability in the fourth quarter.

United Parcel Service slid 5.5 percent to $107.93 after the shipping company reported weak international revenue, while the strong dollar and high fuel prices also hurt its results.

About 24 percent of the companies in the S&P 500 had reported third-quarter results as of Wednesday. Of those, 57 percent delivered earnings and revenue results that topped Wall Street's forecasts.

High-flying companies like Netflix and Amazon took some of the biggest losses Wednesday. Netflix gave back 9.4 percent to $301.83 and Amazon dropped 5.9 percent to $1,664.20.

AT&T was among the big decliners in the media and communications sector, dropping 8.1 percent to $30.36 after the communication giant's latest quarterly results fell short of Wall Street's expectations.

Boeing was one of the few gainers Wednesday. It rose 1.3 percent to $354.65 after the defense contractor's latest quarterly results topped analysts' forecasts. The company also raised its estimates for the year, citing faster orders for aircraft.

In other trading, benchmark U.S. crude lost 50 cents to $66.34 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday it edged up 0.6 percent to settle at $66.82 a barrel in New York. Brent crude, used to price international oils, declined 42 cents to $75.75 a barrel.

The dollar weakened to 112.06 yen from 112.23 yen. The euro rose to $1.1408 from $1.1393.

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Katie Tam in Hong Kong and AP Business Writer Alex Veiga and AP Economics Writer Paul Wiseman contributed.