Widespread tech sell-off drags Wall St down
Abroad sell-off of technology stocks pushed the three major US stock indexes lower on Monday, with the Nasdaq Composite posting its third consecutive loss of more than 1 per cent for the first time in three years just days after hitting a record high.
The technology index tumbled 1.8 per cent as investors looked to other sectors or took profits ahead of the volatile midterm election season.
Shares of Facebook Inc and Netflix Inc slid 2.2 per cent and 5.7 per cent, respectively, pulling their fellow so- called FAANG stocks lower. Other FAANG stocks include Apple Inc, Amazon.com, and Google parent Alphabet Inc.
But technology fell across the board, pushing all three major US stock indexes into negative territory.
The tech-heavy Nasdaq has also seen a sharp uptick in the number of stocks striking 52-week lows. On Monday, 102 Nasdaq-listed stocks fell to their lowest price in a year or more, 65 more than those hitting new highs.
“There’s an enormous amount of money (in tech stocks) and some of that money is rotating out or moving to the sidelines,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York.
“People are concerned about the typical midterm election year cycle.”
“And tariff jitters are front and center,” Kaufman added.
Control of both the US House of Representatives and Senate are at stake in the November midterm elections.
With second-quarter reporting season now well past its midpoint, analysts now expect S&P earnings to have increased by 22.6 per cent, up from the 20.7 per cent seen on July 1.
Of the 270 companies that have posted results, 82.6 per cent have beat consensus estimates.
The Dow Jones Industrial Average fell 144.23 points, or 0.57 per cent, to 25,306.83, the S&P 500 lost 16.22 points, or 0.58 per cent, to 2,802.6, and the Nasdaq Composite dropped 107.42 points, or 1.39 per cent, to 7,630.00.
Of the 11 major sectors of the S&P 500, seven closed in negative territory.
Shares of CBS Corp extended their fall, dropping 5.1 per cent. The media company’s board met on Monday to discuss personal misconduct allegations against Chief Executive Leslie Moonves and said it was selecting outside counsel to conduct an investigation.
Tyson Foods Inc slid 7.6 per cent after the company cut its full-year profit forecast, citing the potential impact of tariffs. The warning also weighed on shares of Hormel Foods Corp and Pilgrim’s Pride Corp, which ended the session down 2.5 per cent and 1.5 per cent, respectively.
Industrial bellwether Caterpillar Inc lost 2.0 per cent, erasing earlier gains after it exceeded second- quarter expectations and raised its fullyear profit outlook.
Energy stocks were among the gainers, up 0.8 per cent as oil prices rose on potential supply disruptions.
AT&T Inc rose 3.0 per cent after Bank of America upgraded its rating on the wireless carrier to “buy.”
Declining issues outnumbered advancing ones on the NYSE by a 1.17-to-1 ratio; on Nasdaq, a 1.85to-1 ratio favored decliners.
The S&P 500 posted 15 new 52week highs and 2 new lows; the Nasdaq Composite recorded 30 new highs and 102 new lows.
Volume on US exchanges was 6.46 billion shares, compared to the 6.01 billion average for the full session over the last 20 trading days.
There’s an enormous amount of money (in tech stocks) and some of that money is rotating out or moving to the sidelines. Wayne Kaufman, chief market analyst at Phoenix Financial Services