Techosta Where Tech Starts From
The Dow closed at a record on Friday even as the Nasdaq skidded nearly 2% as the technology sector abruptly fell in afternoon trade.
The Nasdaq’s retreat comes on the heels of an early record and marked the biggest one-day decline for the Nasdaq since May 17, when it tumbled more than 2.5%.
The Dow Jones Industrial Average DJIA, +0.42% rose 89.44 points, or 0.4%, to end at 21,271.97, for a weekly gain of 0.3%. The S&P 500 SPX, -0.08% edged down 2.02 points to finish at 2,431.77, falling 0.3% on the week.
The Nasdaq Composite Index COMP, -1.80% sank 113.85 points, or 1.8%, to close at 6,207.92. The sudden tech retreat pushed the Nasdaq into negative territory for the week with the tech-heavy index closing down 1.6%.
Apple Inc. AAPL, -3.88% sank 3.9% in its biggest one-day drop since January 2016. The overall technology sector XLK, -2.47% fell 2.5%. Other major tech stocks were also sharply lower. Facebook Inc. FB, -3.30% skidded 3.3%, Alphabet Inc.GOOGL, -3.40% the parent of Google, lost 3.4%, Microsoft Corp. MSFT, -2.27% dropped 2.3% and Amazon.com Inc. AMZN, -3.16% shed 3.2%.
“All these stocks have hit new highs recently, so now people are taking a pause and we’re seeing the money flow out,” said Doug DePietro, managing director for trading at Evercore ISI. “There’s nothing in the news that’s saying, ‘sell the big tech stocks’; this is just simple profit-taking, a rotation to other names.”
The tech sector’s tumble also follows a warning from Goldman Sachs that highfliers such as Facebook, Amazon, Apple, Microsoft and Alphabet—which had significantly contributed to the market’s multimonth rally—may be overextended.
“This outperformance, driven by secular growth and the death of the reflation narrative, has created positioning extremes, factor crowding and difficult-to-decipher risk narratives,” said Robert Boroujerdi, an analyst at Goldman Sachs, in a note.
The tech selloff also triggered a return in market turbulence with the CBOE Volatility Index VIX, +5.31% spiking more than 5% to 10.70. Wall Street’s so-called fear index had earlier sank to 9.37, the lowest since December 1993.
Deeper losses in equities were limited by the energy and financial industries, both of which advanced on the day. Energy shares gained 2.5% while financials were up 1.9%.
J.P. Morgan Chase & Co. GS, +1.68% rose 2.4% and Goldman Sachs Group Inc.GS, +1.68% climbed more than 1.7%. Exxon Mobil XOM, +1.87% added 1.9% while Chevron Corp. CVX, +2.31% was up 2.3%.
Next up, Fed meeting: Traders see a 95.8% probability of a U.S. interest rate increase at the conclusion of the Federal Reserve’s two-day policy meeting next week on June 14, CME Group’s FedWatch showed.
The only top-tier economic data scheduled for release Friday is an update on wholesale inventories for April, due at 10 a.m. Eastern Time.
Stocks on the move: Shares of Endo International PLC ENDP, -16.62% slumped 17% after the Food and Drug Administration late Thursday said it asked the company to stop selling its opioid pain medication, reformulated Opana ER, citing concerns about abuse.
DuPont Fabros Technology Inc. DFT, +9.83% soared 9.8% after the developer and operator of multitenant data centers announced a deal to be purchased by Digital Realty Trust Inc. DLR, -2.94% Digital Realty was down 3.4%.
Other markets: The British pound GBPUSD, -1.6671% sank to a seven-week low against the dollar, dropping to $1.2739 from $1.2957 in late trading on Thursday after Britain’s snap election left Prime Minister Theresa May clinging to power after her Conservative party failed to secure a parliamentary majority.
See: ‘Worst possible outcome’—analysts react to U.K. early election results
The dollar was firmer across the board, with the U.S. dollar index DXY, +0.07%which compares the dollar to a half-dozen major rivals, was flat after trading higher.
Crude oil prices CLQ7, +0.57% strengthened, while gold GCQ7, -0.84% settled lower.
In Asia ADOW, -0.13% the Nikkei 225 index NIK, +0.52% gained on yen weakness, returning to the 20,000 level, with other markets mixed.
–Barbara Kollmeyer contributed to this report.
[“Source-ndtv”]