Dow turns negative, gives up 176-point gain as tech shares drag down market
Stocks fell on Wednesday as Wall Street’s September struggles continued, with tech shares sliding once again.
The Dow Jones Industrial Average traded just below the flatline, giving up a 176-point jump. The S&P 500 slipped 0.3% and the Nasdaq Composite dropped 0.6%.
Shares of Amazon dropped more than 1% along with Netflix to lead most of Big Tech lower. Alphabet slid 1.3%; Microsoft and Apple were down 0.9% and 0.8%, respectively. Shares of Tesla fell 5.2% after Elon Musk offered new delivery predictions for 2020 and detailed a new battery design that it claims will make its cars cheaper to produce.
Stocks that would benefit from the economy reopening — such as airlines and cruise operators — rose after President Donald Trump said the U.S. would not be implementing a second round of lockdowns as the U.K. began imposing stricter measures. “The U.K. just shut down again. They just announced that they’re going to do a shutdown, and we’re not going to be doing that,” Trump said. United Airlines and Delta were up 0.6% and 1.2%, respectively. Carnival gained 1.5%.
Meanwhile, Johnson & Johnson started a phase 3 trial of its coronavirus vaccine. J&J shares were up 1.2%.
Nike shares jumped more than 8% after the company said digital sales surged more than 80% last quarter. Earnings and sales blew past analysts expectations last quarter and the company gave a forecast for growth in the new fiscal year.
On Tuesday, the major averages snapped multi-day losing streaks, led by shares of major tech companies.
“As soon as the S&P 500 reached the official correction zone near a 10% decline… ‘dip buyers’ emerged and have been evident ever since,” Jim Paulsen, chief investment strategist at The Leuthold Group, told CNBC. “These buyers, armed with cash holdings, may be driven less by the ‘fear of missing out’ than they are by the ‘opportunity to finally get in.'”
“Optimism broadened as the day progressed lifting not only technology and communications stocks for the second day, but ending with eight of the 11 sectors within the S&P 500 Index in the green,” added Paulsen.
Still, September continues to be a weak month for stocks with all three averages posting three straight weeks of losses. The Dow is down more than 4% in September and the S&P 500 and Nasdaq Composite have lost 5.3% and 6.9% this month, respectively.
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