By Mark DeCambre, MarketWatch , Chris Matthews

The National Association of Home Builder's confidence index drops the most in four years

Stocks retreated sharply lower Monday, with shares of technology and internet-related companies dragging the market lower. The main equity benchmarks saw losses accelerate in morning trade after a report showed home-builders' confidence plummeted in November.

U.S. financial markets will be closed Thursday for the Thanksgiving Day holiday.

How did the benchmarks perform?

The tech-heavy Nasdaq Composite Index led the markets lower, closing down 219.4 points, or 3%, to 7,028.48. The Dow Jones Industrial Average tumbled 395.8 points, or 1.6%, to 25,017.44, and the S&P 500 index retreated 45.5 points, or 1.7%, at 2,690.73

Last week, the Dow posted a weekly decline of 2.2%, the S&P 500 index declined by 1.6% while the Nasdaq shed 2.2%.

What drove the market?

Investor anxiety, evidenced by last week's declines, continued Monday, following a report on home-builder confidence that showed sector executives less upbeat than at any point in more than two years.

See:Home builder confidence tumbles the most since 2014 as headwinds catch up (http://www.marketwatch.com/story/home-builder-confidence-tumbles-the-most-since-2014-as-housing-headwinds-catch-up-2018-11-19)

Trade issues have been a key driver of volatility, as investors consider the possibility that U.S. tariff rates on a swath of Chinese goods could rise from 10% to 25% in January, as they will under current policy, absent a resolution. President Donald Trump and Chinese President Xi Jinping will meet in Buenos Aires later this month, a summit investors hope will lead to a new trade deal, or at least the delay in tariff hikes.

Trade concerns weighed on the technology sector in particular, as the supply chains of multinational tech firms rely heavily on U.S.-China trade flows.

Meanwhile, investors also keyed in on other political narratives, including Brexit and the Italian budget crisis, which have contributed to market volatility of late. British Prime Minister Theresa May is slated to take her plan to take the U.K. out of the European Union to Brussels after seemingly avoiding a leadership challenge -- at least for now.

Italian and EU officials remain in a protracted deadlock over the Italian government's budget plans, which Brussels said run afoul of the bloc's rules, setting up a clash between the two that could prove disruptive to markets.

Rising interest rates continued to be of concern for investors, as market participants have struggled to interpret comments made by members of the Federal Reserve's interest-rate setting committee in recent days. New York Fed president John Williams was the latest to strike a somewhat dovish tone (http://www.marketwatch.com/story/markets-think-powell-blinked-in-dallas-2018-11-19) in a speech in New York City on Monday, where he said "Our goal is to keep this expansion going for as long as possible."

What are strategists saying?

"Tech continues to be caught in the crosshairs of the triple threat of rising interest rates, global growth fears and trade tensions with China," Chris Zaccarelli, chief investment officer at Independent Advisor Alliance wrote in a research note.

"Trade war concerns with China weigh on the global supply chain for large technology companies while global growth fears worry many that future earnings will be lower," he said.

"Today's housing data was pretty bad," Jim Smigiel, chief investment officer of non-traditional strategies at SEI Investments, told MarketWatch.

He attributed falling home-builder confidence to rising interest rates, which have dampened demand for new homes. At the same time, he doesn't see falling confidence as predicting a broad downturn in the housing industry. "We're in an adjustment period, where consumers are getting used to higher interest rates," he said. "Other factors, like rising wages, low unemployment and demographic factors will help stabilize sentiment towards the housing sector," in the coming months, he said.

Weakness in tech stocks was being driven by "soft guidance from semiconductor companies" such as Nvidia and Texas Instruments, as well as troubling reports concerning demand for Apple's latest iterations of the iPhone, Marc Pinto portfolio manager with Janus Henderson Investments, told MarketWatch.

"My sense is that negative sentiment is Apple-specific," he said, but said that holiday-shopping-season numbers will help paint a broader picture of consumer demand for tech products.

Which stocks were in focus?

Netflix Inc.'s(NFLX)stock chart formed a bearish "death cross," (http://www.marketwatch.com/story/netflixs-first-bearish-death-cross-chart-pattern-to-appear-in-2-years-at-the-open-2018-11-19) as the 50-day moving average fell beneath the 200-day moving average for the first time since October 2016. The stock fell 5.5% Monday.

Sonos Inc. shares closed the day down 11.2%, after the company teased a new roster of its audio products (http://www.marketwatch.com/story/sonos-offers-teaser-for-new-line-of-products-as-shares-rocket-10-2018-11-16).

Nissan Motor Co.(NSANY)(NSANY)Chairman Carlos Ghosn was arrested Monday in Tokyo, Japanese media reported, and Nissan said it intended to oust Ghosn from his post (http://www.marketwatch.com/story/nissan-to-remove-carlos-ghosn-as-chairman-citing-acts-of-misconduct-2018-11-19) after uncovering "significant acts" of financial misconduct. U.S.-traded shares of Nissan (NSANY) fell 5.9%, while shares of Renault SA (RNO.FR) tumbled 8.4% in Paris. Ghosn is also chief executive of Renault and chairman of Mitsubishi Motors Corp.

Shares of Dow component Apple Inc. (AAPL) declined 4% and were in focus after the Wall Street Journal reported that the iPhone maker's production woes are slamming suppliers (http://www.marketwatch.com/story/shares-of-apple-iphone-suppliers-extend-losses-after-wsj-report-of-further-production-cuts-2018-11-19). Last week, major iPhone suppliers including Qorvo Inc.(QRVO), Lumentum Holdings Inc.(LITE)and Japan Display Inc.(6740.TO) lowered financial outlooks.

Climarex Energy Co. shares fell 0.8% after the company announced (http://www.marketwatch.com/story/resolute-energys-stock-set-to-surge-after-16-billion-buyout-deal-with-cimarex-energy-2018-11-19) it would acquire Resolute Energy Co.(REN)in a deal valued at $1.6 billion. Resolute shares closed up 13.8%.

Shares of Spectrum Brands Holdings Inc.(SPB) fell 19% after reporting fiscal fourth-quarter earnings and sales that missed their targets (http://www.marketwatch.com/story/spectrum-brands-missed-earnings-and-revenue-expectations-provides-downbeat-outlook-2018-11-19), combined with a downbeat 2019 outlook.

JD.com's stock(JD) fell 8.4% after the Chinese retailer reported a third-quarter revenue miss (http://www.marketwatch.com/story/jdcoms-earnings-lifted-by-investment-gains-2018-11-19) Monday morning.

Take-Two Interactive Software Inc. shares(TTWO) were down 7% after a report in the New York Post suggesting that it could be part of a three-way merger, along with CBS Corp.(CBSA)and Viacom Inc.(VIA).

What data were in focus?

The National Association of Home Builder's monthly confidence index fell 8 points to 60 in November (http://www.marketwatch.com/story/home-builder-confidence-tumbles-the-most-since-2014-as-housing-headwinds-catch-up-2018-11-19), the largest decline in more than four years, and the lowest overall reading in more than two.

How did other markets trade?

Stocks in Asia ended the trading day (http://www.marketwatch.com/story/asian-markets-quiet-as-us-china-trade-tensions-linger-2018-11-18) broadly higher, with the Nikkei, Hang Seng Indexand Shanghai Composite Indexall advancing.

In Europe, stocks closed the session lower, with the FTSE 100retreating 0.2% and the Stoxx Europe 600down 0.7%.

Crude oil began the day down but rallied to be up 1.3%, with gold up 0.1% and the U.S. dollardown 0.3%.

(END) Dow Jones Newswires

November 19, 2018 16:27 ET (21:27 GMT)