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Nasdaq Suffers Worst Day in a Month as Big Tech Stumbles

Published 07/23/2020, 03:28 PM
Updated 07/23/2020, 04:03 PM
© Reuters.

By Yasin Ebrahim – 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), (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%.      

Latest comments

Blowout earnings on Tesla? LOL. Big 104M. Too funny.
It's profits time
dont worry, nothing im sure the fed printing another $10 trillion at the expense of tax payers cant fix
Eddie Glass, you know very well, what I'm referring to.
no freedom of speech here or what?
 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.
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.
 Maybe. Who knows.
The Robinhood investors will jump on these stocks tomorrow and help push them.
Green days have been low volume as well. Less than red days.
This is all driven from SQQQ and UVXY. Not sure how that doesn’t count as naked shorts? Where is the SEC hiding out?
Ask the SEC to look into 80% of Tesla’s revenue coming from credits instead of sales.
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
I thought sqqq doesnt really control anything since its just an inverse either way you make money in both directions
...but WHY??? The title is just stating the obvious
* to day moves in the market are meaningless, only long-term trends- technicals/fundamentals lasting multiple months or more are worth my bad the title was fine
Everything is awful and was running on hopes and dreams, years out in the future.
Magic money con job will get called one day
One day of sell off, one day flat then 3 bullish days and update historical maximum. Nothing new.
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.
Stocks don't go on a straight line folks... This is neccessary to move up. Buy on dips!
Please dont. For the sake of my shorts xD
gnus has any recovery for its new role .
Tomorrow this c*l*o*w*n will be back with "Markets surge on Vaccine hopes!!!!, YAY!!!!!"
How do you dare? You wrote the exact same thing that I have been writing here in the last week!.."Vaccine hopes"..."Vaccine hopes" . 🤣🤣
 Sorry I'll change to vaccine Pipe Dreams
 I forgive you.
Realization after all-time highs; the reporters understand that as worries on China, second waves... Much incompetence in media I see.
Powell's printer ran out of ink. Today is just the first step towards reality. I don't know if Bulls will be able handle it but it is coming either way.
Lets hope so. Let the stinkin markets function without pumping up big tech stocks.
when Tesla opened today it rose to 1670 and now end of the day 1500 ****
Oh boy, wait for the Friday pre-weekend dump. It’s going to be glorious.
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