Widespread tech sell-off drags Wall Street down

Updated: Tue, Jul 31, 2018
02:15 am
Reuters
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A broad sell-off of technology stocks pushed the three major U.S. stock indexes lower on Monday, with the Nasdaq Composite posting its third consecutive loss of more than 1 percent for the first time in three years just days after hitting a record high.

The technology index <.splrct> tumbled 1.8 percent 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 percent and 5.7 percent, 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 U.S. 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 U.S. House of Representatives and Senate are at stake in the November midterm elections.

With second-quarter reporting season now well past its mid-point, analysts now expect S&P earnings to have increased by 22.6 percent, up from the 20.7 percent seen on July 1. Of the 270 companies that have posted results, 82.6 percent have beat consensus estimates.

The Dow Jones Industrial Average <.dji> fell 144.23 points, or 0.57 percent, to 25,306.83, the S&P 500 <.spx> lost 16.22 points, or 0.58 percent, to 2,802.6, and the Nasdaq Composite <.ixic> dropped 107.42 points, or 1.39 percent, 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 percent. 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 percent 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 percent and 1.5 percent, respectively.

Industrial bellwether Caterpillar Inc lost 2.0 percent, erasing earlier gains after it exceeded second-quarter expectations and raised its full-year profit outlook.

Energy stocks were among the gainers, up 0.8 percent as oil prices rose on potential supply disruptions.

AT&T Inc rose 3.0 percent 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 1.85-to-1 ratio favoured decliners.

The S&P 500 posted 15 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 30 new highs and 102 new lows.

Volume on U.S. exchanges was 6.46 billion shares, compared to the 6.01 billion average for the full session over the last 20 trading days.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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