THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.
Technology stocks took a steep tumble on
The S&P 500 was down 3.8% as of
Both indexes had set their latest record highs a day earlier, and the Nasdaq is still up 27.4% for the year. The S&P 500 had been up nine of the last 10 trading days and posted its fifth straight monthly gain in August.
Big Tech companies have made outsize gains in recent months as investors bet that they would continue posting huge profits even with many coronavirus restrictions still in place as people spend even more time online with their devices. Market watchers have questioning recently whether those gains were overdone.
”There’s really very little to justify (these big stocks' upward move) other than euphoria,” said
Hackett noted the market has “embedded very optimistic assumptions” about the virus's impact on the economy, as well as on prospects for
The Dow Jones Industrial Average fell 874 points, or 3%, to 28,227. It was briefly down 1,000 points earlier.
Technology stocks, which account for a significant chunk of the
Semiconductor stocks also fell sharply. Nvidia,
The stocks that were doing better than the rest of the market were companies whose stocks have been beaten down this year: travel companies and airlines.
Investors were also taking into account the latest economic figures.
The government reported that the number of Americans who applied for unemployment benefits fell last week to 881,000, slightly better than what economists had expected. But that said, companies are still letting workers go at numbers well above those seen in the Great Recession, meaning the jobs picture remains still extremely bleak despite recent improvements.
A gauge of the services sector also came in slightly worse than economists were looking for.
The stock market has rallied this spring and summer after plunging in March as investors realized the economic toll the coronavirus pandemic was going to cause. Most of the rally has been on strong performances from tech stocks, but also a hope that the worst of the pandemic is in the past, despite rising infections in schools and the possibility of a second surge of infections in the fall. Huge amounts of support from the
Investors will be paying close attention Friday when the
A report by payroll processor ADP, widely watched as a forerunner of government employment data due out Friday, showed the private sector added 428,000 jobs in August, less than half the 1 million expected by forecasters.
If tomorrow's jobs numbers do not deliver, it's unlikely the stock market will rally much higher from here, analysts said.
Analysts said that could be a warning sign the job market is cooling after some
“Bullish stock market sentiment seems to be nearing a tentative peak as the labor market recovery stalls,” analyst
Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission., source