Worried investors dump tech stocks
The tech sector is the latest to feel the effects of the global sell-off in stocks.
Market darlings like Facebook and Alphabet (the owner of Google) are being dumped as investors worry that valuations have got ahead of earnings for even the strongest companies.
Facebook was down over 5 percent in early trading today. That follows a fall of 5.8 percent on Friday.
Amazon slumped 4.6 percent, following a fall of 6.4 percent on Friday.
There is growing uncertainty about the global economy. Many hedge fund managers are adopting an attitude of "sell now, ask questions later."
The sell-off means that US technology companies in the S&P500 are heading to their worst price levels since August. They are joining energy, financial and consumer stocks which have also been heavily sold off since the start of the year.
The big tech companies are still making money, and in some cases lots of it. But many tech companies are not making anywhere near as much as investors had been counting on.
Professional social networking company LinkedIn plunged 44 percent on Friday after announcing a growth projection that was weaker than expected.
Investors were spooked when the company's Chief Executive said both Europe and China are slowing down.
Data-analysis firm Tableau Software also released weaker than expected growth forecasts. Its share price slumped 49 percent on Friday.
Any company that disappoints is being punished.
The high-definition camera maker GoPro has seen its stock price fall from a peak of US$98 in October 2014 to as low as US$9, last week. It announced that its sales are slowing and it was going to have to cut prices and reduce the range of cameras it sells.
It staged a comeback this morning, leaping more than 15 percent to US$11, after saying that it is licensing some of its file storage technology to Microsoft.
That was a rare bright spot in a grim day that saw the US markets fall more than two percent in early trading.
European markets were heavily sold off. London's FTSE fell 2.71 percent, Germany's DAX plunged 3.3 percent and France's CAC slumped 3.2 percent.
West Texas crude fell 3.85 percent to US$29.70 a barrel.
There is one winner from the turmoil. Gold has surged to its highest level since June 2015, rising 3.4 percent today to US$1197.
The sell-off is being compounded by forced selling. Some hedge funds are having to sell stocks because worried clients are asking for their money back.
Some funds are having to sell stocks bought on margin. That means they bought stocks with a down payment, or with borrowed money. When the stock falls in value they have to meet a "margin call" or sell the stock.
This means managers are selling stocks even when they believe the long term prospects for the companies are good.