December 20, 2018 / 7:31 PM / 6 months ago

Nasdaq dips into bear market territory

NEW YORK, Dec 20 (Reuters) - The Nasdaq Composite Index , known for its high-profile technology and internet companies, dropped into bear market territory in intraday trading on Thursday, the latest segment of the U.S. stock market to fall more than 20 percent from its previous high.

The Nasdaq's descent in less than four months is the latest sign that the bull market that began in the depths of the financial crisis a decade ago could be coming to an end.

The Nasdaq is the first of the three closely watched U.S. stock barometers to fall into bear territory, with the S&P 500 and the Dow Jones Industrial Average down about 16 percent from their respective highs.

But other segments of the market had already fallen into bear territory, including the Russell 2000 small-cap benchmark and the Dow Jones Transport Average.

The Nasdaq, however, stands out.

"It's always the raciest and spiciest of the indices because it has all of the growth names in it," said Michael Antonelli, managing director of institutional sales trading at Robert W. Baird in Milwaukee. "When growth expectations change, like they have radically over the past few months, the first place they're going to go is to the Nasdaq and absolutely slam it."

The latest bout of selling, which on Thursday dragged the Nasdaq to its lowest level since September 2017, comes a day after the Federal Reserve raised interest rates for a fourth time this year, as the U.S. central bank continues to unwind the low interest rate policy that supported stocks for nearly a decade.

Investors are also grappling with concerns that the trade tensions between the United States and China are undermining the economy, and an expected steep slowdown in U.S. profit growth next year.

At its lowest point so far on Thursday, the Nasdaq was down 2.9 percent on the day, resulting in a 20.5 percent decline from its Aug. 29 record closing high. A bear market is commonly defined as a drop of 20 percent or more from a record or long-standing high closing level.

The Nasdaq's slump has been driven by a steep fall in shares of many large tech and internet companies that have led the stock market during its long bull run.

Apple Inc shares, for example, have fallen nearly 30 percent since the start of November, following the iPhone maker's disappointing sale forecast for the holiday quarter.

Since the Nasdaq hit a record high in late August, Inc, Facebook Inc and Netflix Inc have all tumbled about 25 percent or more. (Reporting by Lewis Krauskopf Additional reporting by Caroline Valetkevitch Editing by Leslie Adler)

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