By Geoffrey Smith
Investing.com -- The sharp sell-off in technology stocks that began at the end of last week gathered pace as U.S. markets reopened in gloomy fashion after the long Labor Day weekend.
The Nasdaq Composite, which has hit a series of new record highs over recent weeks, fell 285 points, or 2.5%, by 10 AM ET (1400 GMT) in what appeared to be an overdue correction. The S&P 500 and Dow Jones Industrial Average were dragged lower, but to a lesser extent. The Dow fell 472 points or 1.7% to 27,661 points and the S&P 500 fell 1.8%.
Leading the losers was Tesla (NASDAQ:TSLA) stock, which fell 15% after being hit by a combination of two factors. The market struggled to digest a $5 billion stock offering placed at the end of last week, while there was also widespread disappointment at the refusal of Standard & Poor's to include it in the S&P 500 index in its most recent review. Much of Tesla's 160% rise since June had been down to speculation that some of the trillions of dollars invested in S&P tracking funds would have to be reallocated to Tesla as it broke into the index.
Other gigacap stocks that had rallied strongly in recent weeks also saw some sharp profit-taking. Apple (NASDAQ:AAPL) stock fell 5.7%, while Facebook (NASDAQ:FB) stock fell 3.6%, Microsoft (NASDAQ:MSFT) stock fell 3.5% while Amazon (NASDAQ:AMZN) stock fell 4.4%, All of them are still well above their pre-pandemic levels, however.
Other stocks that had benefited most from pandemic-driven trades also fell heavily. Zoom Video (NASDAQ:ZM) stock fell 4.4%, while Moderna (NASDAQ:MRNA) stock fell 11% as unease spread about the high degree of insider sales at the company in the last three months. In that time - which has also seen the company conduct a major secondary offering - insiders have sold over 12 million shares and bought only 50,000. The unease was also stoked by news of a government investigation into whether Moderna had filed the patent applications for its Covid-19 and Zika vaccines correctly.
More positively, electric truck-maker Nikola (NASDAQ:NKLA) rose 26% after General Motors agreed to take a $2 billion equity stake in the company. GM (NYSE:GM) stock also rose 5.6% on perceptions of a shrewd acquisition. The two companies will team up to make Nikola's Badger pickup truck together, with production expected to start by the end of 2022. That truck will compete with Tesla's Cybertruck, as well as electric pickups planned by startup Rivian and Ford Motor (NYSE:F).
Other notable outperformers included Walt Disney (NYSE:DIS) stock, which rose 0.8% after the company reported a leap in new subscribers for its streaming channel Disney+ as it chose to distribute its new blockbuster Mulan exclusively through that channel.
Elsewhere, fear returned to the oil and gas sector as Crude Oil Futures slumped on concerns about the stalling recovery in global oil demand. Exxon Mobil (NYSE:XOM) stock, Chevron (NYSE:CVX) stock and ConocoPhillips (NYSE:COP) stock all fell nearly 4% to five-month lows.