Stocks were slammed on Thursday, with high-flying technology and biotech shares leading the declines that saw the Nasdaq posting its worst session in more than two years.
The Dow Jones Industrial Average closed unofficially down 266 points or 1.62 percent. The selling was worse, however, in the tech-laden Nasdaq, which had its worst day since November 2011, dropping 129 points or 3.1 percent. The broader S&P 500 slumped just over 2 percent.
"Clearly investors are nervous about high-flying momentum stocks. There is a rethink on whether better earnings and economic data will support a resumption of the momentum that was driving biotechnology and higher-flying technology stocks earlier in the year," said Kate Warne, investment strategist at Edward Jones.
Momentum tech stocks were the big losers. Facebook fell over 5 percent, while Google, Priceline and Amazon.com all dropped over 4 percent. Biotechnology stocks were bludgeoned too, with Zogenix down almost 9 percent, Pacific Biosciences of California more than 6 percent and ChemoCentryx slumping over 11 percent.
"The market is coming to its senses in some of the high-flying tech names; it looked like there were some pretty hefty amounts being paid for the prospect of eventual earnings. Any of us in the market more than 15 years feels the hot breath on the backs of our necks when we see such high prices being paid for tech stocks," said Jerry Webman, chief economist at Oppenheimer Funds.
The dollar turned lower against the currencies of major U.S. trading partners; the 10-year Treasury yield used in determining mortgage rates and other consumer loans fell 6 basis points to 2.634 percent.
On the New York Mercantile Exchange, gold futures for June delivery gained $14.60, or 1.1 percent, to $1,320.50 an ounce, while crude-oil futures for May delivery fell 20 cents, or 0.2 percent, to $103.40 a barrel.
Investors appeared to ignore positive economic news. The Labor Department earlier reported jobless claims dropped to the lowest level in nearly seven years, with initial claims for state unemployment benefits dropping 32,000 to 300,000 last week, below expectations and the lowest since May 2007.