Wall Street tumbles overnight

Trader Gregory Rowe, left, works on the floor of the New York Stock Exchange. File photo / AP

Wall Street slumped as investors sold, yet again, biotech and internet stocks heading into the quarterly US earnings season, while Bed Bath & Beyond shares took a beating following disappointing results.

Shares of Bed Bath & Beyond plunged 6 per cent after the company reported quarterly earnings and provided an outlook that both fell short of expectations.

In afternoon trading in New York, the Dow Jones Industrial Average dropped 1.35 per cent, the Standard & Poor's 500 Index shed 1.59 per cent, while the Nasdaq Composite Index sank 2.74 per cent.

Leading the declines in the Dow were shares of American Express and Walt Disney, down 3.1 per cent and 2.9 per cent respectively. Shares of McDonald's and AT&T were the only two Dow members that gained, up 1.1 per cent and 0.5 per cent respectively.

"The rotation is out of some of the higher-growth, higher-momentum areas of the market, and until we get earnings visibility, we could see protracted weakness," Eric Teal, chief investment officer at First Citizens Bancshares in Raleigh, North Carolina, told Reuters.

The Nasdaq biotechnology index plunged more than 5 per cent, on track for its biggest one-day slump in nearly three years.

Other stocks bearing the brunt of the sell-off included Facebook and Netflix, both down about 5 per cent.

Solid US jobs data failed to help the mood on Wall Street today but did underscore the improved state of the labour market. Initial claims for state unemployment benefits dropped 32,000 to a seasonally adjusted 300,000 for the week ended April 5, according to the Labor Department. That was the lowest level since May 2007.

It turned out to be a good day for the US to auction US$13 billion in 30-year bonds.

"We've seen a significant retracement in equity prices, which spurred a flight-to-quality bid in the Treasuries markets," Ian Lyngen, a government-bond strategist at CRT Capital Group LLC in Stamford, Connecticut, told Bloomberg News.

In Europe, the Stoxx 600 Index ended the day with a 0.5 per cent drop from the previous close, as did Germany's DAX. France's CAC 40 fell 0.7 per cent. The UK's FTSE 100 bucked the trend, closing up 0.1 per cent. The Bank of England kept its benchmark interest rate at a record low today, as had been widely predicted.

China's exports and imports unexpectedly declined last month, data showed today. The country's overseas shipments fell 6.6 per cent from a year earlier, while imports slumped 11.3 per cent, boosting concern about sagging growth in the world's second-largest economy.

Even so, Chinese Premier Li Keqiang ruled out major stimulus to fight short-term dips in growth, saying that job creation was the government's policy priority, Reuters reported.

"We will not take, in response to momentary fluctuations in economic growth, short-term and forceful stimulus measures," Li said in a speech at an investment forum on the southern island of Hainan. "We will instead focus more on medium- to long-term healthy development."