US STOCKS-Tech leads Wall St sell-off, investors eye slow recovery

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* VIX jumps to a seven-week high
* Weekly jobless claims slip below 1 mln
* Tesla drops for the third straight day
* Indexes fall: Dow 2.57%, S&P 3.27%, Nasdaq 4.56%

(Updates to late afternoon, adds commentary, NEW YORK dateline,
changes byline)
By Sinéad Carew
NEW YORK, Sept 3 (Reuters) - Wall Street's main indexes
tumbled on Thursday and were on track for their deepest one-day
dives since June as investors dumped the high-flying technology
sector, while economic data highlighted concerns about a long
and difficult recovery.
The technology-centric Nasdaq led the declines as its
heavyweight stocks took a hit including Facebook Inc FB.O ,
Apple Inc AAPL.O , Amazon.com Inc AMZN.O , Microsoft Inc
MSFT.O and Google-parent Alphabet Inc GOOGL.O which were all
down between 4% and 7%.
The five stocks, deemed stay-at-home winners during the
coronavirus crisis, also account for roughly a quarter of the
S&P 500's market value and have driven the stock market's narrow
technology-led recovery from the pandemic lows hit in March.
The Philadelphia chip index .SOX and the S&P tech sector
.SPLRCT also dropped more than 5% each.
The pullback comes a day after the S&P 500 and the Nasdaq
closed at record levels and the Dow came within 1.5% of its
February peak, powered by fiscal and monetary support hopes for
a swift economic recovery. But some participants said investors
had become too optimistic.
"Think about the mounting number of risks the market has
been shrugging off over the last couple of months here," said
Emily Roland, co-chief investment strategist and John Hancock
Investment Management. "We're 60 days away from the election.
That may be an area where investors are getting a bit spooked."
She added: "Looking at the data today, the market has had
the ability to power higher and hasn't paid any attention to a
macro environment which, yes, is improving which is encouraging,
but the economy remains fragile here."
Earlier in the day, data showed the number of Americans
filing new claims for unemployment benefits fell more than
expected last week, but remained extraordinarily high. The
closely watched monthly payrolls report is set for
Friday Separately, a survey showed U.S. services industry growth
slowed in August, likely as the boost from the reopening of
businesses and fiscal stimulus faded. At 2:40 p.m. EDT, the Dow Jones Industrial Average .DJI
was down 749.17 points, or 2.57%, at 28,351.33, the S&P 500
.SPX lost 117.09 points, or 3.27%, to 3,463.75 and the Nasdaq
Composite .IXIC dropped 549.32 points, or 4.56%, to 11,507.12.
Wall Street's fear gauge .VIX crossed its 200-day moving
average to hit its highest level in seven weeks.
Still, some investors seemed unconcerned in the face of the
sell-off.
"The prevalent attitude in the market now is that this is a
healthy correction," said Mike Zigmont, head of trading and
research at Harvest Volatility Management in New York.
"(Investors) are in love with tech stocks and it's going to
take more than this for them to fall out of love with them."
Another Nasdaq heavyweight, Tesla Inc TSLA.O , tumbled 8%
after already falling sharply for two straight sessions.
PVH Corp PVH.N rose 5.4% after the Calvin Klein owner
posted a surprise quarterly profit, boosted by strong online
demand for comfortable and casual clothing during the
coronavirus-led shift to work from home. Declining issues outnumbered advancing ones on the NYSE by a
3.62-to-1 ratio; on the Nasdaq, a 3.99-to-1 ratio favored
decliners.
The S&P 500 posted 18 new 52-week highs and no new lows; the
Nasdaq Composite recorded 24 new highs and 48 new lows.