Wall Street Extends Losses as Tech Stocks Drop; Delta Variant Spreads
Wall Street ended lower on Friday, weighed down by declines in Amazon, Apple and other heavyweight technology stocks, while investors worried about a rise in coronavirus cases tied to the highly contagious Delta variant.
On Thursday, Los Angeles County said it would reimpose its mask mandate this weekend. On Friday, public health officials said U.S. coronavirus cases were up 70% over the previous week, with deaths up 26%.
Cruise lines Carnival Corp and Norwegian Cruise Line both fell about 5% during wall street trading.
“COVID is starting to affect the market, ironically, for the first time since last summer, when the reopening trade began,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
Amazon and Apple fell more than 1%. Nvidia lost 4.2%, and the three companies contributed more than any others to the S&P 500 and Nasdaq’s declines. The S&P 500 technology sector index lost almost 1%, dipping for a second session after hitting a record on Wednesday.
The utilities index rallied 1%, while the real estate index edged up 0.1% and touched an intraday record high.
Analysts on average expect 72% growth in earnings per share for S&P 500 companies, according to IBES estimate data from Refinitiv.
With the S&P 500 up about 15% so far this year, investors will look for strong company forecasts to justify sky-high valuations.
“It’s been hard for the market to gain here from these already elevated prices,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
The S&P 500 energy sector index sank nearly 3% on wall street and ended the week 8% lower, with investors worried about expectations for more supply and a rise in coronavirus cases that raised demand concerns
Data from the Commerce Department showed retail sales rebounded 0.6% last month as spending is shifting back to services, bolstering expectations that economic growth accelerated in the second quarter.
Wall Street Index Overview
The Dow Jones Industrial Average fell 0.86% to end at 34,687.85 points, while the S&P 500 lost 0.75% to 4,327.16. The Nasdaq Composite dropped 0.8% to 14,427.24. For the week, the S&P 500 fell about 1%, the Dow lost 0.5% and the Nasdaq shed 1.9%, their fist weekly declines in four weeks.