Wall St slides overnight as Twitter sinks

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

Wall Street slid overnight as Twitter led a decline in tech stocks amid concern about valuations for the industry, while worries about the escalation of the conflict in Ukraine also weighed on the market.

Shares of Twitter sank, last down 15.9 per cent, as post-initial public offering restrictions on selling the stock expired, underpinning concern about the company's outlook.

"The move is bigger than expected and is indicative of the negative investor sentiment towards Twitter right now," Atlantic Equities analyst James Cordwell told Reuters. "I am starting to think that sentiment might have got too negative, but I don't see anything that can turn this around in the near term."

Other tech stocks slumped in Twitter's wake as sentiment has been shaky on the industry in recent weeks. Shares of LinkedIn sank 6 per cent, Netflix slid 4.4 per cent, Facebook declined 3.8 per cent, Amazon fell 3.5 per cent, while Groupon fell 2.9 per cent.

With about an hour of trading left in the day in New York, the Dow Jones Industrial Average dropped 0.7 per cent, the Standard & Poor's 500 Index slid 0.7 per cent, and the Nasdaq Composite Index fell 1.1 per cent.

Slides in shares of Merck and Pfizer, down 2.6 per cent and 1.9 per cent respectively, led the Dow lower. Merck's decline came as it agreed to sell its consumer products' unit to Bayer for US$14.2 billion.

On the economic front, a Commerce Department report showed that the US trade deficit shrank in March, narrowing 3.6 per cent to US$40.4 billion, boosted by exports. The data underpinned the view that the US economy has gathered strength.

"The strong finish to the last quarter points to further improvement in the trade balance in the coming months if this positive momentum is sustained," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.

Investors will closely monitor US Federal Reserve Chairman Janet Yellen's testimonies to Congress on Wednesday and Thursday for a potential fresh update of her take on the economy.

In Europe, the Stoxx 600 Index finished the session with a slide of 0.3 per cent from the previous close. The UK's FTSE 100 fell 0.4 per cent, Germany's DAX shed 0.7 per cent, while France's CAC 40 dropped 0.8 per cent.

A report showed that retail sales in the euro zone unexpectedly increased 0.3 per cent in March from the previous month, accelerating from a revised 0.1 per cent advanced in February.

Separately, Markit's Purchasing Managers' Index for services in the euro region rose to 53.1 in April, up from 52.2 in March, bolstered by Germany.

"The final PMI confirms the earlier flash estimate, indicating that the euro zone started the second quarter with the fastest growth seen for three years," Chris Williamson, chief economist at Markit, said in a statement, adding that "at this rate we can expect GDP to rise by at least 0.5 per cent in the second quarter."