Dow loses 400 points, Nasdaq falls 3% as April sell-off resumes led by tech stocks

U.S. stocks fell sharply on Tuesday continuing a vicious April sell-off after a one-day breather as investors dumped shares on fears of an economic slowdown. Tech stocks led the decline as investors didn't want to wait around for Microsoft and Alphabet first-quarter results after the bell Tuesday, fearing more blow-ups like the one seen in Netflix earlier in the earnings season.

The tech-heavy Nasdaq Composite dropped 3% and retreated more deeply into bear market territory, sitting now 22% off its high. The Dow Jones Industrial Average shed about 478 points, or 1.4%, led by losses in global consumer bellwether Nike. The S&P 500 lost 1.8%.

For April, the S&P 500 is off by more than 6%, the Nasdaq is down about 11% and the Dow is down roughly 3%. The Nasdaq Composite neared its low for the year set in March.

Concerns about the global economy loomed as investors worried about a Covid surge in China, along with high inflation in the U.S. denting demand for goods from houses to sneakers.

"There are a lot of economic growth concerns," said Peter Boockvar, chief investment officer at Bleakley Advisory Group. "China is a big customer for U.S. tech. ... The semiconductor industry does a lot of business there. But it's also concerns with growth here as well."

Nvidia and AMD each lost more than 5% on Tuesday.

Mega-cap tech names fell ahead of quarterly earnings reports this week. Microsoft and Google parent Alphabet both lost more than 2% ahead of quarterly reports after the bell Tuesday. Facebook parent Meta, Amazon and Apple were also lower Tuesday, with earnings results slated for later this week.

Netflix shares fell to a new multi-year low, dropping 5%. Last week Netflix plunged 35% in a single day after reporting a surprising subscriber loss for the first quarter.

The strength in Big Tech stocks in recent years "is likely to burst when fundamentals start to meaningful deteriorate as the overall economy slows," Wolfe Research's Chris Senyek said in a research note.

Tesla, which has a factory in Shanghai and counts China as a major market for its electric vehicles, was the biggest laggard on the Nasdaq Composite, down 9%. The shares also came under pressure as its CEO and founder, Elon Musk, looked to close his proposed deal to buy Twitter for $44 billion.

Chip stocks were among the top decliners on the Nasdaq Composite. Nvidia fell about 5% and AMD retreated more than 4%.

Cyclical names tied to economic growth also suffered Tuesday. Dow component 3M fell about 2% despite better-than-expected earnings as the company noted macroeconomic and geopolitical challenges ahead. UPS shares also fell 3% despite the shipper's quarterly earnings and revenue topping expectations.

Other industrial names like General Electric and Boeing were lower in early morning trading Tuesday. GE fell more than 10%, while Boeing eased 2.8%. GE warned that its 2022 outlook was "trending toward the low end of the range."

Bank stocks also struggled as interest rates fell. U.S. Treasury yields declined, with the benchmark 10-year rate falling below 2.8%. Goldman Sachs fell more than 1% and Wells Fargo was marginally lower.

Tuesday's sell-off was broad-based with every sector down except energy, which benefited from slightly higher oil prices.

On Monday, the Dow rallied back from a near 500-point loss to recover into the green, adding some hope that maybe a respite in the April selling was here. But