By DAMIAN J. TROISE and ALEX VEIGA
AP Business Writers
Stocks fell sharply in afternoon trading Monday as Wall Street comes off its worst week since winter. The price of oil hit a seven-year high as OPEC and allied oil producers stuck with a plan to cautiously raise production even as global demand for crude oil increases.
The S&P 500 fell 1.4% as of 2:20 p.m. Eastern. The Dow Jones Industrial Average dropped 368 points, or 1.1%, to 33,958.
Losses in technology stocks pushed the Nasdaq lower by 2.2%. Apple fell 2.5% and Microsoft fell 2.4%. Big communication companies also slipped. Facebook fell 5.2% a day after a former employee told “60 Minutes” that the company has consistently chosen its own interests over the public good.
U.S. crude oil prices rose 2.7% and topped $77 per barrel for the first time since 2014. OPEC and allied oil producing countries on Monday decided to stay with their cautious approach to restoring oil production slashed during the pandemic, agreeing to add 400,000 barrels per day in November.
Natural gas prices jumped 2.8%. Energy companies rose along with energy prices. Devon Energy rose 6.9%.
The yield on the 10-year Treasury rose to 1.48% from 1.47% Friday. The yield was at 1.31% on Sept. 20, and the recent jump has contributed to weakness in technology stocks. A swift rise in interest rates has forced a reassessment of whether stocks have grown too expensive, particularly already high-priced technology companies.
Investors are increasingly worried about inflation as oil prices rise and companies continue facing supply problems that increase their costs and force them to raise prices. Wall Street is also worried about the Federal Reserve’s timing on trimming back bond purchases and its eventual move to raise its benchmark interest rate.
“You really have a lot of reasons for the tape to trade defensively right now,” said Julian Emanuel, chief equity and derivatives strategist at BTIG. “If you’re not going to get the bond market rallying and yields declining, then the likelihood is you see more volatility in stocks,” he said.
Investors are also preparing for the latest round of corporate earnings, which will ramp up in the next several weeks. They are also still closely monitoring economic data for more signals about the pace of the recovery as businesses and consumers continue to deal with the impact of COVID-19 and the highly contagious delta variant.
Wall Street will get more information on the economy’s health this week. On Tuesday, the Institute for Supply Management will release its service sector index for September. The services sector is the largest part of the economy and its health is a key factor for growth.
On Friday, the Labor Department will release its employment report for September. The employment market has been struggling to fully recover from the damage done by COVID-19 more than a year ago.
Tesla held on to a slight gain after the electric vehicle maker reported surprisingly good third-quarter deliveries. The stock was up 1.2%, but rose as much as 4% in morning trading.
In Asia, Hong Kong’s benchmark fell more than 2% after troubled property developer China Evergrande’s shares were suspended from trading. Shares in most European markets edged higher.
Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.