NEW YORK - Biotech and Internet stocks tumbled again Thursday, and the broader market followed.
After a two-day respite, investors again started dumping shares of cutting-edge drug companies and other industries that have soared over the past year. Biotechnology stocks have turned volatile in recent weeks as regulators scrutinize the cost of their drugs and investors worry that their earnings won’t justify lofty stock prices. Investors are also worried that high-growth companies such as Twitter and Facebook have become too expensive.
The rout started slowly and picked up speed throughout the day. By the close, the tech-heavy Nasdaq composite index had its worst day since November 2011. Few companies escaped the selloff. Of the Nasdaq’s 100 largest stocks, only one, C.H. Robinson Worldwide, a freight company, ended higher.
The Nasdaq ended the day down 129.79 points, or 3.1 percent, to 4,054.11. It is now down 7 percent from its recent high reached March 5.
Other major indexes also fell, but not as much.
The Standard & Poor’s 500 index dropped 39.10 points, or 2.1 percent, to close at 1,838.08. The Dow Jones industrial average lost 266.96 points, or 1.6 percent, to 16,170.22.
Biogen Idec, Gilead Sciences and other biotech companies plunged. Facebook and Twitter, other recent investor favorites, also dropped.
The sudden downfall of these former high-fliers comes as investors shift from riskier investments to safer areas such as utilities, health care and consumer staples. The sell-off in these former darlings, whose stock prices appealed to investors because their rise seemed unstoppable, has weighed on the overall market, especially the Nasdaq.
Gilead Sciences slid $5.17, or 7 percent, to $65.48 on Thursday. Biogen Idec dropped $13.33, or 4 percent, to $287.35. Both roughly doubled in value last year.
Facebook, another stock that doubled last year, sank $3.25, or 5 percent, to $59.16.
The market’s drop wiped out gains made earlier in the week. On Wednesday, minutes from the Federal Reserve’s latest meeting reassured investors that the central bank wasn’t in a hurry to raise interest rates. The S&P 500 had its best day in a month.
Brad McMillan, chief investment officer for Commonwealth Financial, said it seems like investors had been searching for a reason to push the market up. “But there’s no compelling story,” he said. “Without a catalyst to move the market higher, people are going to start questioning their assumptions.”
Ally Financial Inc., the auto lender rescued by the U.S. government during the 2008 financial crisis, dropped in its trading debut after pricing its initial public offering at the low end of an expected range.
Ally shares fell 4.1 percent to close at $23.98 in New York under the ticker symbol ALLY. The U.S. Treasury Department, which had been the Detroit-based firm’s majority shareholder, raised $2.38 billion by selling the shares for $25 each.
In government bond trading, the yield on the 10-year Treasury note dipped to 2.63 percent from 2.69 percent late Wednesday. The price of crude oil fell 20 cents to close at $103.40 a barrel. Gold climbed $14.60 to settle at $1,320.50 an ounce.
Information for this article was contributed by Elizabeth Dexheimer and Leslie Picker of Bloomberg News.
Business, Pages 28 on 04/11/2014