Coverage: The stock market suffers widespread losses

U.S. stocks plunged Wednesday as investors, fearful that rising interest rates and trade tensions could hurt company profits, ramped up their selling of high-flying technology and internet stocks.

Marley Jay and Stan Choe of the Associated Press had the news:

The Dow Jones Industrial Average fell 831 points, its worst loss in eight months.

The losses were widespread, and stocks that have been the biggest winners on the market suffered steep declines. Apple and Amazon, the two most valuable companies in the S&P 500, each had their worst day in two and a half years.

The Nasdaq composite, which has a high concentration of technology companies, sustained its biggest loss in more than two years and has dropped almost 8 percent since the start of October.

Wednesday’s drop should be placed in perspective. Since early 2009, the S&P 500 has quadrupled, driven higher by the U.S. economic expansion, hefty profits for corporations and historically low interest rates, all of which makes stocks an attractive investment.

Paul Whitfield of Investor’s Business Daily reported that blue chips and upscale companies fell:

Action was mostly negative among top-rated stocks.

The Innovator IBD 50 Fund stabbed 4% lower. The exchange traded fund based on the IBD 50 is now 13% off its high and under its 50-day and 200-day moving averages.

Blue chips were mostly down. In the 30-component Dow, footwear marketer Nike, chipmaker Intel and aerospace play Boeing lost 2% to 4%.

In the S&P 500, jeweler Tiffany and cosmetics maker Estee Lauder dived 7% and 6% respectively. Tiffany cleared a flat base in July but then began a decline. The stock is 19% off its high.

Estee Lauder appeared to be climbing the right side of a cuplike pattern, but Wednesday morning’s ugly gap down called that into question.

Adam Shell of USA Today reported that investors have become nervous:

Nervousness had been building for days on Wall Street. The catalyst was the recent spike in the yield on a closely watched government bond to a seven-year high.

The 10-year Treasury note — whose key rate impacts the pricing on things ranging from fixed-rate mortgages to stocks to virtually every financial asset on the planet — recently climbed above 3.25 percent for the first time since May 2011. And when you add the threat of higher borrowing costs on things like houses and cars and corporate debt to the economic obstacles caused by the U.S. trade war with China, all it takes is a whiff of weakness to set a major sell-off in motion.

“We don’t know who is to blame here; it’s a little like trying to find what or who is responsible for the dangerous hurricane in Florida today,” says Chris Rupkey, chief financial economist at MUFG, a Tokyo-based global bank with offices in New York. “But make no mistake about it, the stock market decline, triggered perhaps by rising bond yields, is just as dangerous.”