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VIX jumps as technology sector tumbles

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VIX jumps as technology sector tumbles

After the technology sector endured a tough third quarter, concerns about Apple Inc.'s new iPhone production once again weighed on the industry, driving a closely watched measure of market worries sharply higher.

The CBOE Volatility Index, or VIX, was up 16.71% at 20.26 at 4:00 p.m. ET. The S&P 500 Index closed down 1.72% at 2726.22, while the tech-heavy Nasdaq Composite Index closed down 2.78% at 7200.87.

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Apple shares fell 5.04% to end the trading day at $194.17.U.S. equities opened in the red on the news that Lumentum Holdings Inc. was reducing its outlook after one of its largest customers cut its orders for its 3-D sensing laser technology. Lumentum's products are used in Apple's new iPhones and the announcement raised questions about how well those phones are selling ahead of the busy holiday season.

In the past, the information technology sector has been relatively hard hit when the VIX moved more than 10% on the day, according to data from Kensho Technologies Inc., a unit of S&P Global Market Intelligence. An analysis of market data since 2005 shows that IT was down an average of 1.99% when the VIX breached that threshold.

And paper losses generally continued for Apple, and other tech companies, even as volatility subsided. On average, the day after the VIX spiked more than 10%, Apple recovered only 0.2%, according to Kensho data. Chipmaker Intel Corp. on average fell 2%, with a day-after average recovery of 0.3%, while Microsoft Corp. on average was down 2% and saw a 0.1% day-after move on average.

General Electric Co. was another company worrying investors after new CEO Lawrence Culp told CNBC there was "very much a sense of urgency" to reduce its debt through asset sales. GE's stock fell 6.88% to close at $7.99.

The company has had problems turning around its struggling power division. During its Oct. 30 earnings announcement the industrial manufacturer said it was taking a $22 billion write-down, mostly stemming from its 2015 acquisition of Alstom SA's power business. GE also revealed that regulators were looking into the power business charge. In addition, GE said it was cutting its quarterly dividend from 12 cents to 1 cent.

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