Indexes drop more than 1% as tech sell-off continues

(Reuters) – Major U.S. stock indexes were down more than 1% in afternoon trading as technology shares sold off again and investors kept worrying about rising coronavirus cases.

FILE PHOTO: Health care workers walk with protective face masks on past the New York Stock Exchange, amid the coronavirus disease (COVID-19) pandemic, in the lower section of Manhattan in New York City, U.S., September 9, 2020. REUTERS/Shannon Stapleton

Apple Inc AAPL.O, Microsoft Corp MSFT.O, Inc AMZN.O and Alphabet Inc GOOGL.O were among the biggest drags on the S&P 500 and Nasdaq, while the S&P 500 technology index .SPLRCT, was on track for a third day of losses.

Volatility has the potential to be higher, with Friday marking the quarterly expiration of U.S. stock options, stock index futures and index option contracts, known as “quadruple witching.” The expirations often bring about increased trading volume at the market close and can feed into market volatility.

Strategists said investors appeared to be continuing a recent rotation out of high-flying tech-related stocks and into other areas of stocks.

“It looks to be sentiment driven and, to some extent, it appears to be rotational to us,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.

“We’re not sure this really indicates there’s a problem with economic growth, but rather, it’s some profit-taking, some adjustment and rotation” between sectors, he said. “You’re moving from the biggest weights in the market to the smallest weights.”

The S&P materials .SPLRCM is the best-performing sector so far this month, while heavily weighted S&P technology is the worst.

The Dow Jones Industrial Average .DJI fell 293.27 points, or 1.05%, to 27,608.71, the S&P 500 .SPX lost 45.21 points, or 1.35%, to 3,311.8 and the Nasdaq Composite .IXIC dropped 164.73 points, or 1.51%, to 10,745.55.

European countries from Denmark to Greece announced new restrictions on Friday to curb surging coronavirus infections in some of their largest cities, while Britain was reported to be considering a new national lockdown.

Wall Street’s three main indexes bounced earlier this week as investors bet on a loose monetary policy by the Federal Reserve.

Tesla rose 3.6% as two analysts raised their price targets on the electric carmaker’s shares ahead of its highly anticipated “Battery Day” event next week.

Oracle Corp ORCL.N dipped 0.6% after Reuters reported the U.S. Commerce Department plans to issue an order on Friday that will bar people in the United States from downloading Chinese-owned messaging app WeChat and video-sharing app TikTok starting on Sept. 20.

The owner of the widely popular TikTok app, ByteDance, is in talks with Oracle and others to create a new company, TikTok Global.

On a bright note, a survey showed U.S. consumer sentiment improved in early September.

Declining issues outnumbered advancing ones on the NYSE by a 2.55-to-1 ratio; on Nasdaq, a 1.55-to-1 ratio favored decliners.

The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 57 new highs and 18 new lows.

Source: Read Full Article