Dow Jones

Wall Street Closes Lower as Tech Stocks add Losses.

US stocks have closed lower after a choppy trading session as heavyweight tech-related stocks resumed their decline following a sharp rebound the previous session while elevated jobless claims reminded investors of a still-difficult recovery ahead.

Names that have rallied since March lows, such as Apple Inc , Microsoft Corp and, all fell at least 2.8 per cent. Tesla Inc rose 1.4 per cent, initially helping to limit the Nasdaq’s losses before the tech-heavy index’s slide widened.

The NYSE FANG+TM Index, which includes the core FAANG stocks, fell 1.8 per cent and all 11 sectors of the S&P 500 traded lower.

Wall Street’s main indices bounced back sharply on Wednesday from their biggest three-day rout since March as investors returned to tech-focused stocks that are deemed insulated from the current economic downturn.

The number of people in the US filing new claims for unemployment benefits remained high last week, Labor Department data showed, as lay-offs and furloughs persisted across industries.

In addition, the US Senate on Thursday killed a Republican bill that would have provided about $US300 billion ($A412 billion) in new coronavirus aid, as Democrats seeking far more funding prevented it from advancing.

Senate Majority Leader Mitch McConnell said in an interview with Fox News the electoral outcome for control of the Senate could go either way.

“It’s more of this sort of stew of stuff than has come together than any one particular thing you can point to, and maybe most importantly you are looking at an extended market,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

“This thing has had a massive move so the line of least resistance might be to correct a little bit.”

Massocca cited election uncertainty and the length of time it may take the economy to fully reopen due to the coronavirus pandemic.

The Dow Jones Industrial Average fell 405.89 points, or 1.45 per cent, to 27,534.58, the S&P 500 lost 59.77 points, or 1.76 per cent, to 3,339.19 and the Nasdaq Composite dropped 221.97 points, or 1.99 per cent, to 10,919.59.

The S&P tech index was one of the weaker performers on Thursday afternoon, stumbling 2.28 per cent.

Despite the recent pullback, the tech index is up about 24 per cent in 2020, far outperforming the benchmark S&P 500’s rise of 3.3 per cent in the same period.

A few notably large, bullish tech-related options positions in Facebook Inc, Adobe Inc and Netflix Inc were partially unwound on Thursday, in line with more cautious sentiment toward tech names, according to Christopher Murphy, co-head of derivatives strategy at Susquehanna Financial Group.

Many market participants view the sell-off as a bout of turbulence rather than the start of a deeper slide.

The CBOE volatility index climbed on Thursday. The index hit a near three-month high at the start of a historically tumultuous September.

Investors have also remained cautious as data paints a mixed picture of US economic health. A separate report showed US producer prices rose slightly more than expected in August as the cost of services increased solidly.

Energy stocks dropped 3.67 per cent as oil prices extended losses after US data showed a surprise build in crude stockpiles last week and on forecasts for lower global oil demand.

Declining issues outnumbered advancing ones on the NYSE by a 2.14-to-1 ratio; on Nasdaq, a 1.97-to-1 ratio favoured decliners.

The S&P 500 posted 6 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 42 new highs and 25 new lows.

About 9.72 billion shares changed hands in US exchanges compared with the 9.23 billion daily average over the last 20 sessions.

Scroll to Top