US stocks sink; Nasdaq drops 2.4%

This July 15, 2013, file photo shows a sign for Wall Street outside the New York Stock Exchange, in New York. US stocks fell sharply Wednesday with Nasdaq suffering the deepest declines on worries that technology and biotech equities have become overvalued. AP PHOTO/MARK LENNIHAN

NEW YORK–US stocks fell sharply Wednesday with Nasdaq suffering the deepest declines on worries that technology and biotech equities have become overvalued.

The tech-rich Nasdaq Composite Index, which stood above 5,000 on Monday, plummeted 118.21 points (2.37 percent) to 4,876.52.

The Dow Jones Industrial Average sank 292.60 (1.62 percent) to 17,718.54, while the broad-based S&P 500 fell 30.45 (1.46 percent) to 2,061.05.

Analysts cited growing concerns that biotech shares in particular have risen to unjustifiably high levels behind clinical results for drugs that will not hit the market for many years.

Biogen shed 4.7 percent, while Celgene lost 4.2 percent.

Further selling has been spurred by end-of-quarter profit-taking, said Peter Cardillo, chief market economist at Rockwell Global Capital.

Analysts also pointed to a 1.4 percent drop in durable goods orders in February. Barclays cited the weak durable goods report in projecting US gross domestic product growth for the first quarter of just 1.2 percent.

Technology stocks with big declines included Apple (-2.6 percent), Microsoft (-3.4 percent) and Google (-2.0 percent). Netflix and Twitter both lost 3.8 percent and Tesla Motors shed 3.7 percent.

Chipmakers also were weak, with Texas Instruments dropping 4.6 percent and Micron Technology losing 5.0 percent.

Kraft Foods surged 35.6 percent to $83.17 after HJ Heinz’s owners 3G Capital and Warren Buffett’s Berkshire Hathaway agreed to pay about $10 billion in a special dividend of $16.50 per share to Kraft shareholders in a proposed merger deal to create the world’s third-largest food company. The special dividend represented a 27 percent premium to Kraft’s closing price on Tuesday.

Petroleum-linked stocks were lifted by higher oil prices. Dow member Chevron gained 1.4 percent, Nabors Industries rose 2.6 percent and Anadarko Petroleum added 1.1 percent.

Bond prices fell. The yield on the 10-year US Treasury rose to 1.93 percent from 1.87 percent Tuesday, while the 30-year advanced to 2.51 from 2.46 percent. Bond prices and yields move inversely.