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Nasdaq Suffers Worst Day in a Month as Big Tech Stumbles

Stock Markets Jul 23, 2020 04:03PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Nasdaq suffered its worst day in nearly one month on Thursday as a sea of red swept through mega-cap tech stocks and a jump in jobless claims renewed concerns about the pace of the recovery as the relentless spread of the virus continues.

The Nasdaq Composite fell 2.29% and S&P 500 lost 1.23%, while the the Dow Jones Industrial Average slumped 1.31%.

Mega-cap tech, which has done most of heavy-lifting to support the broader market rally since March, came under pressure as concerns about frothy valuations resurfaced.   

Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL),  Amazon.com (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB) and Microsoft (NASDAQ:MSFT), the so-called Fab 5, making up about 40% of the Nasdaq, fell more than 3%. 

Apple led the sell off after Goldman urged investors to avoid the stock, citing expectations for slowing growth in 2021.  "We continue to forecast calendar 2021 earnings per share for Apple that is 16% below consensus as product unit sales and average selling prices falter and services growth slows," Goldman Sachs (NYSE:GS) said.

Microsoft ended 4% after its guidance fell short of consensus estimates and overshadowed better-than-expected quarterly results.

Tesla (NASDAQ:TSLA), meanwhile, reversed gains to end lower despite rolling blowout earnings for the second-quarter and retaining initial guidance to deliver over 500,000 vehicles for the year.

Twitter sidestepped the selloff to end up 4% as the social media company reported a 34% jump in daily active users. Its shares closed 4% higher.

Investor sentiment was further soured by signs of cracks in the labor market.  

The U.S. Labor Department reported that 1.4 million people filed for unemployment insurance for the week ended July 18, up 109,000 from the prior week and above economists' estimates of 1.3 million.

'The surge of Covid cases in the Sun Belt and the stalling out of reopening activities in other states has seemingly caused another round of layoffs that has stymied the nascent labor market recovery,' Jefferies (NYSE:JEF) said in a note.

The number of confirmed U.S. coronavirus cases neared 4 million, according to Johns Hopkins data, the most in the world.

Despite growing doubt over the prospect of a robust recovery, stocks tied to the performance proved more somewhat resilient. Financials, energy, and industrials ended the day with losses of less than 1%.      

Nasdaq Suffers Worst Day in a Month as Big Tech Stumbles
 

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Comments (15)
Jay West
Jay West Jul 23, 2020 9:50PM ET
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Blowout earnings on Tesla? LOL. Big 104M. Too funny.
Snow Attitudes
Snow Attitudes Jul 23, 2020 8:55PM ET
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It's profits time
eddie glass
eddie glass Jul 23, 2020 8:12PM ET
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dont worry, nothing im sure the fed printing another $10 trillion at the expense of tax payers cant fix
Barani Krishnan
Barani Krishnan Jul 23, 2020 8:12PM ET
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I think the administrators jumped bumped you off this site, right, for violating basic decency rules in commenting. You just worked your way back in today, I notice, and have started your nonsense again. Fret, not. They're watching and will throw you out again.
Barani Krishnan
Barani Krishnan Jul 23, 2020 8:12PM ET
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Eddie Glass, you know very well, what I'm referring to.
Jay West
Jay West Jul 23, 2020 8:12PM ET
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Barani Krishnan no freedom of speech here or what?
Barani Krishnan
Barani Krishnan Jul 23, 2020 8:12PM ET
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Jay West  There is, plenty. First Amendment very much alive here. But there are rules (not mine) and Eddie Glass has been on the wrong side of the code set by the administrators and that's why they have bumped him off. He also posted on another story last night and that's what I was referring to. He just think he's being super cool, sarcastic but fails to realize how otherwise he sounds. Anyway, the administrators set the rules, I don't. And they bump people off often for language. For the record, I haven't complained against him. believe in replying, not complaining.
Tom Pym
Tom Pym Jul 23, 2020 7:00PM ET
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Just an overreaction to the unemployment claims.  Ridiculous if you ask me considering if you paid any attention they would have remembered California shutdown all indoor activities.  Of course there would be a spike in unemployment after that.  So much for forward looking markets.
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Tom Pym
Tom Pym Jul 23, 2020 7:00PM ET
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David Johnson  Don't have to.  If it was going to crash more than this it would have already.  These red days have been low volume.  Not much selling interest.
Brad Park
Brad Park Jul 23, 2020 7:00PM ET
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Tom Pym famous last words
Tom Pym
Tom Pym Jul 23, 2020 7:00PM ET
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Brad Park  Maybe. Who knows.
Brian Denny
Brian Denny Jul 23, 2020 7:00PM ET
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The Robinhood investors will jump on these stocks tomorrow and help push them.
Ty VM
2ADV Jul 23, 2020 7:00PM ET
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Tom Pym Green days have been low volume as well. Less than red days.
Bret Lafrance
Bret Lafrance Jul 23, 2020 5:53PM ET
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This is all driven from SQQQ and UVXY. Not sure how that doesn’t count as naked shorts? Where is the SEC hiding out?
Plopseven Schwartz
Plopseven Schwartz Jul 23, 2020 5:53PM ET
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Ask the SEC to look into 80% of Tesla’s revenue coming from credits instead of sales.
Junior Ju
Junior Ju Jul 23, 2020 5:53PM ET
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Market maker hedge Position by short index futures so there won’t be naked short selling in stocks ... pls correct me if 8’m wrong
Adam Fowler
Adam Fowler Jul 23, 2020 5:53PM ET
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I thought sqqq doesnt really control anything since its just an inverse either way you make money in both directions
Bulls MakeMore
Bulls MakeMore Jul 23, 2020 5:23PM ET
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...but WHY??? The title is just stating the obvious
Bulls MakeMore
Bulls MakeMore Jul 23, 2020 5:23PM ET
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*nevermind...day to day moves in the market are meaningless, only long-term trends- technicals/fundamentals lasting multiple months or more are worth analyzing...so my bad the title was fine
Plopseven Schwartz
Plopseven Schwartz Jul 23, 2020 5:23PM ET
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Everything is awful and was running on hopes and dreams, years out in the future.
Raksaksa Tonne
Raksaksa Tonne Jul 23, 2020 5:10PM ET
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Magic money con job will get called one day
Space Lord
Space Lord Jul 23, 2020 5:08PM ET
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One day of sell off, one day flat then 3 bullish days and update historical maximum. Nothing new.
Mark Jew
Mark Jew Jul 23, 2020 4:57PM ET
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At least the editor didn't come up a random excuse to justify the move in the title. Hope this humility lasts for more than d day.
Odum Francis
Odum Francis Jul 23, 2020 4:49PM ET
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Stocks don't go on a straight line folks... This is neccessary to move up. Buy on dips!
djavid hosseini
djavid hosseini Jul 23, 2020 4:49PM ET
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True
Brad Park
Brad Park Jul 23, 2020 4:49PM ET
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Please dont. For the sake of my shorts xD
 
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