'Tech is out': The day that cost Jeff Bezos $11.6 billion
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'Tech is out': The day that cost Jeff Bezos $11.6 billion

The world's tech titans just took one on the chin.

The Nasdaq Composite Index tumbled 4.4 per cent on Wednesday, the most in more than seven years, erasing almost $US33 billion ($47 billion) from the fortunes of technology's 61 richest people, according to the Bloomberg Billionaires Index.

Amazon's Jeff Bezos, the world's richest person, lost $US8.2 billion ($11.6 billion) during the trading session, reducing his net worth to $US138 billion. At the same time, Facebook Chief Executive Officer Mark Zuckerberg's fortune dropped by $US3.2 billion and Google co-founders Larry Page and Sergey Brin saw their fortunes slide by a combined $US4.5 billion.

Amazon chief Jeff Bezos has had better days.

Amazon chief Jeff Bezos has had better days.Credit:AP

The 500 wealthiest people ranked on the Bloomberg index lost a total of $US71 billion as the Dow Jones Industrial Average and S&P 500 also tumbled, erasing this year's gains.

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The Nasdaq Composite Index is now down 12 per cent from an August record, meeting the accepted definition of a correction. Apple, Amazon.com, Microsoft and Google's parent company Alphabet, which account for almost a quarter of the index by weighting, have dragged it lower as investors grow increasingly concerned that outsize profit gains won't be sustainable.

"Looks like we're seeing a continued rotation from growth to value and a move into defensive stocks in general," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. "Tech is out and utilities are in. There's a lot of fear out there."

Defensive sectors including utilities, real estate, and consumer staples were the only ones that gained on Wall Street on Wednesday. Amazon.com shares fell 5.9 per cent, Apple was down 3.4 per cent, and Netflix fell 9.4 per cent.

Tech is out and utilities are in. There's a lot of fear out there.

Chris Zaccarelli, chief investment officer at Independent Advisor Alliance

"Tech has been special for the last several years, the problem is tech has quietly stopped leading at the pace it was since the spring or summer," said Jim Paulsen, chief investment strategist at Leuthold Weeden. "It has increasingly lost more of that leadership and momentum itself. Growth has lost its leadership.'

Both Amazon and Alphabet are set to report earnings on Thursday US time in what's sure to be a high stakes event. Netflix initially jumped near 10 per cent last Wednesday after a better-than-expected forecast for subscriber additions, only for those gains to be wiped out shortly thereafter.

Technology companies aren't alone to blame for the losses. Since the high in late August, the Nasdaq Bank Index has fallen the most of the eight Nasdaq subgroups. With eight of the members falling 30 per cent or more since then as banks report earnings, the 341-member gauge has tumbled 16 per cent.

Bloomberg