GROWTH CONCERNS SPOOK INVESTORS
Nasdaq confirms bear market as tech index declines accelerate after White House adviser’s comments
WALL Street stocks fell sharply in volatile trading on Friday, with the Nasdaq confirming it is in a bear market, as concerns of slowing economic growth led investors to flee stocks in high-valuation sectors such as technology and communication services.
The major United States stock indexes accelerated declines in the last hour of trading after White House trade adviser Peter Navarro said the US and China might not reach a trade deal at the close of a 90-day negotiating window unless Beijing can agree to a profound overhaul of its economic policies.
With Friday’s losses, the Nasdaq has fallen nearly 22 per cent from its August 29 high. The tech-heavy index dropped to its lowest level since August last year.
The benchmark S&P 500 index, already on pace for its biggest percentage decline this year since the Great Depression, hit its lowest level since July 2017. It is now down 17.5 per cent from its closing high on September 20.
The Dow Industrials fell to its lowest level since October last year and has declined 16.3 per cent from its October 3 closing high.
The mid-cap S&P 400 also confirmed it is in a bear market.
Navarro’s comments added to mounting concerns over political uncertainty and the possibility of a slowdown in economic growth.
“That’s definitely a weight on the market,” said Shannon Saccocia, chief investment officer at Boston Private. “For investors, there’s a heck of a lot of small storms to be sailing ships through.”
The increasing likelihood of a partial government shutdown injected further pessimism into US stock markets. President Donald Trump said there was a very good chance a government funding bill, which includes funding for a wall along the Mexico border, would not pass the Senate.
Technology and communication services stocks bore the brunt of the selloff, falling three and 3.1 per cent, respectively.
The FAANG group of momentum stocks fared poorly. Facebook Inc shares tumbled 6.3 per cent, Amazon.com Inc shares slid 5.7 per cent and Netflix Inc shares sank 5.4 per cent. Shares of both Apple Inc and Google parent Alphabet Inc dropped more than three percent.
The Dow Jones Industrial Average fell 414.23 points, or 1.81 per cent, to 22,445.37, the S&P 500 lost 50.84 points, or 2.06 per cent, to 2,416.58 and the Nasdaq Composite dropped 195.41 points, or 2.99 per cent, to 6,333.00.