"This volatility isn't going away any time soon," said Christopher Giordano, founder of Los Gatos-based Giordano Wealth Management Group, an investment advice firm. "We are telling clients to reset their expectations. The stock market will not go up all the time."
The technology-focused Nasdaq plunged 2.1 percent, the blue chip Dow Jones industrial average tumbled 1.6 percent and the broad-based S&P 500 dropped 1.5 percent.
"The stock market is like the weather. It can be cloudy, rainy, sunny, windy, you just have to live with that," said Bob Chhabra, a San Jose resident who is invested in stocks. "About 10 to 15 years ago, I was a day trader, and I lost a lot of money. Now I don't react on a daily basis, I invest long term."
Renewed concerns over a global economic slowdown, tensions in the oil-rich Middle East, along with a stock market decline of 7 percent in China, coalesced to unleash a day of dismal trading on Wall Street.
A new economic report that showed the U.S. manufacturing sector in recession territory also spooked investors.
Investors also pummeled Bay Area technology stocks. The SV150, which tracks the stock performance of the 150 largest publicly held technology companies in the Bay Area, dipped 2.1 percent Monday, matching the start for the Nasdaq and raising concerns those companies have become overvalued in recent months.
"You have high valuations for tech stocks, which now are expensive compared to other types of stocks," said Jeffrey Elfont, president of Walnut Creek-based Pinnacle Capital Management. "A lot of tech companies are hoping to grow their profits in the future to eventually match the valuations. That's why tech stocks are being hit so hard."
Among the 10 largest technology stocks in the Bay Area, Cupertino-based Apple was the only one that rose Monday. Apple gained 0.1 percent.
Los Gatos-based Netflix was the worst performer, plummeting 3.9 percent. Sour comments from Baird Equity Research, an investment firm, contributed to the selling spree. Baird warned that the subscriber outlook for Netflix looks weak.
Foster City-based Gilead Sciences fell 3.1 percent, San Jose-based Cisco Systems was down 2.7 percent, Google owner Alphabet plunged 2.5 percent, Menlo Park-based Facebook lost 2.3 percent, San Francisco-based Salesforce.com fell 2.2 percent, San Jose-based Adobe Systems dropped 2.1 percent, Redwood City-based Oracle tumbled 1.7 percent and Santa Clara-based Intel fell 1.3 percent.
"There are a lot of nervous investors out there," said John Valentine, principal executive with Danville-based Valentine Capital Wealth Managers. "Things are looking worse."
San Ramon-based Chevron, the largest nontech publicly held company in the Bay Area, fell 1.2 percent.
Also of note in the Bay Area: Palo Alto-based Tesla Motors dipped 3.9 percent, despite disclosing that it sold 50,000 electric vehicles in 2015. Theodore O'Neill, analyst for Ascendiant Capital Markets, blamed the Tesla dip on sluggishness in the Chinese economy. The Dow fell 276.09 to finish at 17,148.94; the S&P 500 dropped 31.28 to end at 2,012.66; and the Nasdaq lost 104.32 to close at 4,903.09.
Measured by percent change, Monday's trading marked the worst first day of the year for the Dow since Jan. 2, 2008, when the closely watched index fell nearly 1.7 percent.
But analysts say it takes more than one bad day to warrant serious concern.
"With my clients, I tell them not to panic," said Brian Lombardo, a San Jose-based certified financial planner with a wealth management practice. "Even though volatility is the new normal, we should be able to take care of that volatility by being invested for the long term and being well diversified."
A fresh reading on the nation's economy will emerge Friday with the release of the latest jobs report, measuring December activity for employment in the United States.
Despite the retreat for technology shares, some experts believe tech will remain a relatively hot ticket for investors in 2016.
"People will invest in tech stocks because they are looking for future earnings," Valentine said. "Money will continue to pour into that sector."
Some investors seem prepared to withstand the tumult of a roller-coaster year for the stock market.
"There will be a lot of ups and downs in 2016," Chhabra said. "But you don't take a loss until you sell a stock. So if I don't have to sell, I'm going to hold it."
©2016 the Contra Costa Times (Walnut Creek, Calif.) Distributed by Tribune Content Agency, LLC.
