Dow retreats from record high by dropping 600 points

The Dow Jones Industrial Average fell more than 600 points Tuesday morning in a tech stock sell-off after the index hit a record high on Monday.

By mid-morning, the Dow was down 615 points, or 1.8 percent, the S&P 500 dropped 68 points, or 1.6 percent, and the tech-heavy Nasdaq fell 197 points, or 1.5 percent.

The Dow passed 35,000 for the first time on Monday but scaled back those gains before closing. It was hovering below 34,200 Tuesday morning.

The drops follow significant gains in recent weeks, easing some concerns about inflation and the possibility of raising interest rates.

Nigel Green, chief executive of the deVere Group, cited inflation concerns for the recent sell-off but said the drop in tech stocks was likely to bounce back.

“Savvy investors will be drawn to the massive growth that tech offers and this sell-off will used as a buying opportunity,” he said of falling tech stocks.

“Nobody seriously believes the future isn’t online.”

A worse-than-expected showing in April’s employment data, released last week, raised questions about the strength of the labor market recovery.

Labor Department data released Tuesday showed that there were an all-time high of 8.1 million new job openings at the end of March, a figure that adds weight to arguments about potential labor shortages.

Republicans have argued that higher-than-normal unemployment benefits are causing Americans to stay home rather than jump back into the labor force, where some jobs could pay less than the expanded pandemic unemployment packages.

Democrats counter that the unemployment benefits are playing a negligible role and point to ongoing health concerns over the coronavirus and difficulties finding child care as playing bigger roles. They also say businesses could fill more positions by offering higher wages.

President Biden weighed in Monday by saying that people who turn down job offers lose their eligibility for unemployment benefits.