Wall Street Plunges on Tech Selloff, Worries Over Speed of Recovery
The major U.S. stock index futures plunged on Thursday, posting their worst one day performance since June as investors dumped high-flying technology-focused stocks, while economic data highlighted concerns about a long and difficult recovery.
The pullback in stocks comes a day after the S&P 500 and NASDAQ Composite closed at record levels and the Dow came within 1.5% of its February peak, powered by unprecedented fiscal and monetary support.
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In the cash market on Thursday, the benchmark S&P 500 Index settled at 3455.06, down 125.78 or -4.19%. The blue chip Dow Jones Industrial Average finished at 28292.73, down 807.77 or -3.21% and the technology-driven NASDAQ Composite closed at 11458.10, down 598.34 or -6.30%.
Stocks on the Move
Shares of Facebook Inc, Apple Inc, Amazon.com Inc, Microsoft Inc and Google-parent Alphabet Inc sank between 4.9% and 7%.
The five stocks, deemed stay-at-home winners during the coronavirus crisis, account for nearly a quarter of the S&P 500’s market capitalization and have driven the stock market’s narrow technology-led recovery from the pandemic lows hit in March.
Tesla Inc tumbled 8%, falling for the third straight session.
PVH Corp rose 4.5% after the Calvin Klein owner posted a surprise quarterly profit, boosted by strong online demand for comfortable and casual clothing during the coronavirus-led shift to work from home.
Sectors on the Move
The Philadelphia chip index and the S&P tech sector also dropped about 5% each, with investors also booking profits ahead of the Labor Day weekend.
The NYSE FANG+TM Index, which includes the core FAANG stocks, shed 5.5%, putting it on track for its biggest one-day decline since March 16.
The Internals
Declining issues outnumbered advancers for a 3.25-to-1 ratio on the NYSE and for a 3.76-to-1 ratio on the NASDAQ.
The S&P Index recorded 18 new 52-week highs and no new lows, while the NASDAQ recorded 23 new highs and 45 new lows.
Meanwhile, the VIX, otherwise known as Wall Street’s fear gauge, crossed its 200-day moving average to hit its highest level in seven weeks.
Economic News
Data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, but remained extraordinarily high. The closely watch monthly Non-Farm Payrolls report is set for Friday at 12:30 GMT.
Additionally, a survey showed U.S. services industry growth slowed in August, likely as the boost from the reopening of businesses and fiscal stimulus faded.
For a look at all of today’s economic events, check out our economic calendar.