Traders work on the floor of the New York Stock Exchange at the closing bell of the Dow Jones Industrial Average on June 8, 2017 in New York. Wall Street stocks ended higher Thursday as investors took in stride dramatic testimony from ousted FBI chief James Comey on his firing by President Donald Trump and links to the Russia investigation. The advance was good enough to lift the Nasdaq to a fresh record, while the Dow and S&P 500 eked out modest gains. / AFP PHOTO / Bryan R. Smith
NEW YORK: Technology stocks sold off on Friday, wounding the Nasdaq and holding down other major Wall Street indexes, which had touched record highs earlier in the session.
The technology sector, which has soared this year and led the market’s rally, dropped 3.6% (in afternoon trading).
Apple shares fell 4.8% and were the biggest weight on the three major indexes, after a report that upcoming iPhones launched will use modem chips with slower download speeds than some rival smartphones.
Microsoft, Facebook and Alphabet all were off more than 3%, while chipmaker Nvidia traded down 8.8% at US$147.60 after Citron Research said the stock could trade back to US$130.
Shares of software company Cloudera tumbled 16.7% after its earnings report.
“Tech has been on a tear for a very, very long period of time,” said John Praveen, managing director for Prudential International Investments Advisers in Newark, New Jersey, adding that investors may be using the earnings report as “an excuse to take some profits.”
The Dow Jones Industrial Average fell 17.02 points, or 0.08%, to 21,165.51, the S&P 500 lost 15.88 points, or 0.65%, to 2,417.91 and the Nasdaq Composite dropped 166.89 points, or 2.64%, to 6,154.87.
Countering tech’s slide, financials rose 1.4% and energy shares gained 2.3% as oil prices moved higher.
Investors were also digesting major political and economic events this week in the United States and Europe.
US stocks had started the session strong after the results of the UK election, where British Prime Minister Theresa May’s Conservative Party lost its parliamentary majority.
Investors also viewed former FBI director James Comey’s testimony on Thursday as not damaging enough to Donald Trump’s presidency.
Market watchers were concerned result of the Congressional hearing could derail Trump’s plans for lower taxes, fiscal spending and looser regulations, which have helped drive the S&P 500 up more than 13% since his election.
Focus was turning to the Federal Reserve’s meeting next week, when the US central bank is overwhelmingly expected to raise interest rates.
“Markets are probably expecting that the Fed will raise rates, but they will be very gradual in removing monetary accommodation,” Praveen said.
Advancing issues outnumbered declining ones on the NYSE by a 1.50-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favoured advancers. - Reuters
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