Stocks fall as tech shares slide once again, Nasdaq drops 1%
Stocks fell on Friday to end a volatile week as tech struggled once again to find upside traction and recover from its September losses.
The Dow Jones Industrial Average slid 57 points, or 0.2%. The &SP 500 dropped 0.6% and the Nasdaq Composite fell 1%.
Shares of Apple dropped more than 2%. Microsoft and Alphabet pulled back by more than 1% along with Amazon. Netflix slipped 0.5%. Facebook was flat. Oracle, meanwhile, slipped 0.3% after the U.S. government said it will block all TikTok and WeChat downloads in the country on Sunday. Oracle is trying to finalize a partnership deal with TikTok-parent ByteDance.
Big Tech is down broadly week to date as investors continue to dump the high-flying stocks this month. Facebook and Amazon have dropped more than 4% week to date. Alphabet, Netflix, Apple and Microsoft are also down sharply over that time period. For the month, all six stocks are down more than 10%.
The S&P 500 tech sector was down 0.6% and was on pace for its first three-week losing streak since September 2019.
Friday’s moves come as a series of individual stock, ETF and index options are set to expire. This could lead to volatile trading as small and large investors alike unwind these positions ahead of the expirations.
Wall Street was also coming off a sharp drop in the previous session as investors were on edge about the outlook on further coronavirus stimulus as well as the timing of a viable vaccine. Republicans and Democrats are still struggling to agree on how much aid to continue to provide in a follow-up bill to the previous $2 trillion package. President Donald Trump said Wednesday he liked “the larger numbers,” urging GOP lawmakers to go for a bigger coronavirus stimulus, but his comments left Republicans skeptical.
“The signs point to a decelerating U.S. economic recovery and increasing thematic risks,” analysts at MarketDesk Research said in a note. “It feels as if the bullish market narrative is changing in real time. Given all of the headline risks, we would error on the side of caution in the coming months.”
Meanwhile, the path to a Covid-19 vaccine, which is critical to the economic recovery, still seems unclear. Health officials said vaccinations would be in limited quantities this year and not widely distributed for six to nine months.
“A safe and transparent vaccination process is critical to encouraging widespread inoculations once effective vaccines are identified and tested.” Mark Haefele, UBS Global Wealth Management’s chief investment officer, said in a note. “In our central scenario, we expect widespread vaccine availability by 2Q21.”
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