Nasdaq falls for third straight session as FAANGs slide
The Nasdaq Composite was on track to post its third straight session of more than 1 percent declines for the first time in three years, as disappointing forecasts from technology and internet companies sparked growth worries.
The technology index tumbled 2.22 percent as underwhelming results from Facebook, Twitter and Intel sparked fears about future growth for the sector that has led the equity market to record highs.
The so-called FAANG group also dropped. Facebook slid 4.7 percent and Netflix, whose results also disappointed, sank 5.7 percent. Amazon and Alphabet, both of which had reported healthy results, fell 2.8 percent and 2.2 percent, respectively.
Apple, which is due to report earnings after the bell on Tuesday, was down 0.9 percent.
"When you see the market leaders pull back it`s going to weigh on the entire market. We`re starting to see profit taking in a lot of these tech companies and investors are getting out of growth stocks," said Shawn Cruz, manager, trader strategy at TD Ameritrade in Chicago.
"Since Apple is the last FAANG stock we are going to hear from, I think we need a really good report or we are going to see weakness in the market."
At 13:05 a.m. EDT the Dow Jones Industrial Average was down 139.87 points, or 0.55 percent, at 25,311.19, the S&P 500 was down 20.39 points, or 0.72 percent, at 2,798.43 and the Nasdaq Composite was down 124.78 points, or 1.61 percent, at 7,612.64.
Five of the 11 major S&P sectors were higher, led by the telecoms sector`s 2.3 percent gain. The sector was boosted by AT&T`s 3 percent jump after Bank of America upgraded the wireless carrier`s stock, according to CNBC.
Higher crude oil prices boosted the energy sector up 0.72 percent.
Caterpillar was up 0.5 percent, easing from higher gains before the bell when the heavy equipment maker reported a quarterly profit that beat estimates and raised its full-year profit outlook.
The S&P banks index was up 0.4 percent ahead of the Federal Reserve`s two-day meeting starting Tuesday. The Fed is expected to keep rates unchanged and reaffirm its outlook for further rate hikes.
American Express fell 3.1 percent after the Wall Street Journal reported the company raised currency conversion rates for its business clients without notifying them.
Tyson Foods dropped 7.3 percent after cutting its full-year profit forecast, blaming uncertain trade policies and higher tariffs. Hormel Foods, Sanderson Farms and Pilgrim`s Pride fell between 1.9 percent and 2.8 percent.
Advancing issues outnumbered decliners for a 1.02-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.38-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and two new lows, while the Nasdaq recorded 22 new highs and 77 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.