Stocks slide after North Korea accuses the US of declaring war (FB, AAPL, NFLX, GOOGL, AMZN, GM)

Markets Insider

U.S. stocks fell sharply in late morning trading on Monday after North Korea accused the United States of declaring war and a selloff in technology stocks accelerated.

North Korea's foreign minister said President Donald Trump had declared war on North Korea and that Pyongyang reserves the right to take countermeasures.

The five tech giants — Facebook, Amazon, Apple, Netflix and Alphabet — were down between 3.7 percent and 1.05 percent, weighing on the three major indexes.

The S&P technology index slid 1.37 percent, on track for its worst single-day percentage loss since Aug. 17. The index, however, has climbed 23 percent so far this year, outperforming the 11.5 percent gain in the broader S&P index.

"Technology stocks have been outperformers for a while, so it could be a slight amount of profit taking," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Heightened expectations of another interest rate hike this year following comments from a Federal Reserve official also added to the downbeat sentiment.

The central bank is on track to gradually raise interest rates as factors depressing inflation are fading and the U.S. economy's fundamentals are sound, New York Federal Reserve President William Dudley said.

Investors are also awaiting a speech by Fed Chief Janet Yellen later in the week for more guidance on the monetary policy.

At 11:16 a.m. ET, the Dow Jones Industrial Average was down 92.38 points, or 0.41 percent, at 22,257.21, the S&P 500 was down 9.5 points, or 0.38 percent, at 2,492.72 and the Nasdaq Composite was down 62.65 points, or 0.97 percent, at 6,364.28.

Six of the 11 major S&P sectors were lower. While tech sector was the biggest laggard, the energy index was the biggest gainer, rising 0.91 percent.

Oil prices hit eight-month highs after major producers said the global market was on its way toward rebalancing.

General Motors rose 2.36 percent after Deutsche Bank upgraded the automaker's stock to "buy", pointing to its autonomous vehicles, which could be ready for deployment within quarters.

Allergan was up more than 3.72 percent after the drugmaker authorized a $2 billion buyback of its shares and said its chief financial officer would retire.

Chicago Chief Charles Evans and his Minneapolis counterpart, Neel Kashkari are scheduled to speak later in the day.

Advancing issues outnumbered decliners on the NYSE by 1,404 to 1,342. On the Nasdaq, 1,656 issues fell and 1,075 advanced.

NOW WATCH: Why you won't find a garbage can near the 9/11 memorial