U.S. stocks hammered by tech selloff; Dow plummets 1.62%

U.S. stocks plunged on Thursday fueled by a sell-off in the technology and biotechnology sectors, as investors viewed valuations have grown too lofty.

At the close of U.S. trading, the Dow 30 fell 1.62%, the S&P 500 index fell 2.09%, while the Nasdaq fell 3.10%.

Biotech, Internet and other tech companies, bigt beneficiaries of a five-year bull market fueled in part by loose monetary policies, took a pounding on Thursday on sentiments valuations have grown too high.

Facebook shares plunged 5.21%, search-engine giant Google fell 3.59% while Apple shares fell 1.29%.

Defensive plays did see some demand, as investors shifted their focus away from momentum stocks and more towards safer plays that will produce stable earnings and cash flow as the underlying economy improves without Fed support.

Since the 2008 financial crisis, the Federal Reserve has bought trillions of dollars in bonds in an effort to suppress borrowing costs to spur recovery, with stocks being one of the biggest beneficiaries.

Leading Dow Jones Industrial Average performers included McDonald's Corporation (NYSE:MCD), up 1.10%, AT&T Inc (NYSE:T), up 0.59%, and Coca-Cola Company (NYSE:KO), down 0.24%.

The Dow Jones Industrial Average's worst performers included American Express Company (NYSE:AXP), down 3.77%, Walt Disney Company (NYSE:DIS), down 3.68%, and J P Morgan Chase & Co (NYSE:JPM), down 3.16%.

European indices, meanwhile, finished largely lower.

After the close of European trade, the DJ Euro Stoxx 50 fell 0.98%, France's CAC 40 fell 0.66%, while Germany's DAX fell 0.54%. Meanwhile, in the U.K. the FTSE 100 rose 0.10%.

On Friday, the U.S. is to round up the week with data on producer price inflation and the preliminary report on the University of Michigan’s consumer sentiment index.