Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Indexes & Markets

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 

Tech Shares Lead Stocks Lower

share with twitter share with LinkedIn share with facebook
09/23/2020 | 03:53pm EDT

By Sam Goldfarb and Joe Wallace

U.S. stocks fell sharply Wednesday, extending their turbulent run as hopes for additional fiscal stimulus dimmed, coronavirus cases rose and investors continued to question the valuations of tech stocks.

The S&P 500 was recently down 2.3%, following a rally of more than 1% Tuesday. The Dow Jones Industrial Average fell around 2%, while the tech-heavy Nasdaq Composite dropped 2.9%.

Stocks have whipsawed this week: the S&P 500 briefly neared correction territory Monday -- defined as a retreat of 10% from a recent high -- only to rebound Tuesday. One bright spot on both days was the technology sector, which showed signs of stabilizing after dragging down indexes in previous weeks.

But traders were back in selling mode Wednesday, continuing to lighten up on large tech stocks -- such as Apple, Google parent Alphabet and Amazon.com -- that had powered the market higher over much of the summer.

Putting further pressure on the sector, the Justice Department submitted a proposal to Congress to curb longstanding legal protections for internet companies and force them to shoulder more responsibility for managing content on their sites.

Investors were also confronting the risk of a fresh wave of coronavirus in Europe and an uptick in U.S. cases, helping pull down stocks across a range of industries.

"Markets are really changing very rapidly their mind-set," said Nadège Dufossé, deputy global head of multiasset at Candriam, an asset manager based in Luxembourg.

The Federal Reserve's continued support to the economy should help stocks, but the dwindling chances that lawmakers agree on a new round of economic stimulus before November's election are weighing on sentiment, Ms. Dufossé added.

Reflecting on tech stocks, many investors remain confident that the fallout from the coronavirus pandemic will only accelerate shifts to a more online world that will provide major benefits to the sector. At the same time, worries have increased of late that this year's rally may have stretched valuations to an unsustainable level.

"Some of these names have risen so far so fast, I think that people have to start doing the work and saying, 'Does it make sense for all of these companies to be so strong?'" said Pete Santoro, senior portfolio manager at Columbia Threadneedle.

Among individual companies, shares of Tesla fell 10% after Chief Executive Elon Musk said it could take three years to fully realize large reductions in battery costs, disappointing some investors. Mr. Musk's target to produce 20 million vehicles a year also came without a precise timeline or budget.

Shares of Nike surged 7.5% after the sportswear company said sales rebounded over the summer. Shares of General Mills gave up early gains to fall 0.5% after the Cheerios and Bisquick maker reported stronger sales for its most recent quarter.

Surveys of U.S. purchasing managers indicated manufacturing and service-sector activity kept expanding this month, though at a slightly slower pace than in August.

Meanwhile, surveys of purchasing managers in Germany, France and Japan showed resurgent coronavirus cases were pinching service providers in Europe and Asia. The reports on overseas conditions by data firm IHS Markit suggested a faltering end to the third quarter for the global economy, though the manufacturing sector remained a bright spot. The data suggested output may struggle to return to pre-pandemic levels until a vaccine becomes widely available.

The House passed a short-term spending bill keeping the U.S. government funded through Dec. 11, likely averting a partial shutdown when the funding expires next Thursday.

Still, the focus in Congress has shifted this week to the efforts to fill the late-Justice Ruth Bader Ginsburg's seat in the Supreme Court, rather than reaching an agreement over a second coronavirus-relief package, investors said.

Testifying before a congressional panel, Fed Chairman Jerome Powell repeated his view that more government spending would allow the Fed to more quickly meet its goals of a healthy labor market and 2% annual inflation.

U.S. government bonds remained in a narrow range. The yield on 10-year Treasury notes edged up to 0.676% from 0.663% Tuesday. The WSJ Dollar Index gained 0.6%, climbing for a fourth day.

U.S. crude-oil for November delivery gained 0.3% to $39.93 a barrel. Gold futures dropped 2% to $1859.90 a troy ounce.

Overseas markets were mixed. The Stoxx Europe 600 rose 0.6%, while China's Shanghai Composite Index edged up 0.2% and Japan's Nikkei 225 closed slightly lower.

Write to Sam Goldfarb at sam.goldfarb@wsj.com and Joe Wallace at Joe.Wallace@wsj.com


Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. 3.80% 1616.11 Delayed Quote.20.67%
APPLE INC. -5.60% 108.86 Delayed Quote.48.29%
DJ INDUSTRIAL -0.59% 26501.6 Delayed Quote.-7.14%
EURO / US DOLLAR (EUR/USD) -0.01% 1.1645 Delayed Quote.4.16%
GENERAL MILLS, INC. -0.17% 59.12 Delayed Quote.10.38%
GOLD 0.04% 1878.635168 Delayed Quote.23.14%
IHS MARKIT LTD. 0.55% 80.87 Delayed Quote.7.33%
LONDON BRENT OIL 0.53% 37.86 Delayed Quote.-43.09%
NASDAQ 100 -2.62% 11052.94579 Delayed Quote.26.56%
NASDAQ COMP. -2.45% 10911.59093 Delayed Quote.21.61%
NIKE, INC. -2.26% 120.08 Delayed Quote.18.53%
NIKKEI 225 -1.52% 22977.13 Real-time Quote.-2.87%
S&P 500 -1.21% 3269.96 Delayed Quote.1.21%
S&P/CITIC 300 INDEX 0.03% 4097.16 Delayed Quote.15.36%
S&P/CITIC 50 INDEX 0.02% 4085.34 Delayed Quote.9.32%
STOXX EUROPE 600 0.18% 342.36 Delayed Quote.-17.67%
STOXX EUROPE 600 NR 0.18% 753.21 Delayed Quote.-16.07%
TESLA, INC. -5.55% 388.04 Delayed Quote.363.80%
WTI -1.29% 35.72 Delayed Quote.-41.06%
share with twitter share with LinkedIn share with facebook
Latest news "Markets"
10/30Dow Wraps Up Worst Month Since March
10/30LONDON STOCK EXCHANGE : FTSE 100 logs worst month since March on virus resurgence
10/30Dow on Track to Wrap Up Worst Month Since March
10/30Dow on Track to Wrap Up Worst Month Since March
10/30EUROPE : European shares slide on the week as lockdowns dull recovery hopes
10/30Dow on Track to Wrap Up Worst Month Since March
10/30Dow on Track to Wrap Up Worst Month Since March
10/30TSX slips as energy stocks weigh, virus cases surge
10/30Dow on Track to Wrap Up Worst Month Since March
10/30TSX slips as energy stocks weigh, virus cases surge
Latest news "Markets"