Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Nasdaq ends sharply lower in tech sell-off

Stock MarketsMay 04, 2021 07:36PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A street sign, Wall Street, is seen outside New York Stock Exchange (NYSE) in New York City, New York, U.S., January 3, 2019. REUTERS/Shannon Stapleton 2/2

By Krystal Hu and Shreyashi Sanyal

(Reuters) - The Nasdaq ended sharply lower on Tuesday as investors dumped megacap growth stocks to seek shelter in more defensive parts of the market, amid concerns on rising interest rate and uncertainty over an upcoming jobs report.

Highly valued technology-related companies including Microsoft Corp (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) Inc, Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and Facebook Inc (NASDAQ:FB) sold off across the board, with Apple falling the most by 3.54%. The Philadelphia Semiconductor Index also dropped by 1.6%.

Volume on U.S. exchanges was 12.21 billion shares, the highest in over a month.

"When we have pauses or pullbacks, people tend to move out of growth stocks into more defensive names," said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:SCHW) in Austin, Texas.

Materials and financials extended their Monday gains, up by 1% and 0.7%, respectively, as investors continued to rotate money into cyclical sectors.

The Nasdaq Composite dropped 261.62 points, or 1.88%, to 13,633.50, while the S&P 500 lost 28 points, or 0.67%, to 4,164.66.

The Dow Jones Industrial Average pared its earlier losses and closed slightly higher, rising 19.8 points, or 0.06%, to 34,133.03.

Comments by Treasury Secretary Janet Yellen on the potential need for interest rate hikes further exacerbated the tech sell-off, as investors worry higher rates would weigh on valuations of growth companies.

"It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat, even though the additional spending is relatively small relative to the size of the economy," she said in taped comments at a virtual event by The Atlantic.

"Wall Street won’t find out if the Fed is making a policy mistake until several months down the road and that is making some traders nervous," Edward Moya, senior market analyst at Oanda wrote in a note, adding investors look for clarity on economic recovery from Friday’s nonfarm payroll report.

Fiscal stimulus, rapid vaccinations and the Federal Reserve's accommodative stance have spurred a strong rebound in the U.S. economy and pushed Wall Street to record highs this year. The so-called "pandemic winners," however, have recently started to fall out of favor.

Among individual stocks, CVS Health Corp (NYSE:CVS) gained 4.4%after reporting a first-quarter profit above analysts' estimates and raising its 2021 forecast.

Gartner (NYSE:IT) was the largest percentage gainer on the S&P 500, jumping 14.2% after better-than-expected first-quarter earnings.

In extended trade, T-Mobile rose 2.8% after the telecom firm raised its full-year postpaid subscriber net addition forecast.

Results in this earnings season so far have been largely upbeat. Average profits at S&P 500 companies are expected to have risen 47.7% in the quarter, compared with forecasts of a 24% growth at the start of April, according to IBES data from Refinitiv.

Declining issues outnumbered advancing ones on the NYSE by a 1.47-to-1 ratio; on Nasdaq, a 2.60-to-1 ratio favored decliners.

The S&P 500 posted 97 new 52-week highs and no new lows; the Nasdaq Composite recorded 109 new highs and 99 new lows.

Nasdaq ends sharply lower in tech sell-off
 

Related Articles

European Stocks Mixed; Miners Help FTSE 100 Outperform
European Stocks Mixed; Miners Help FTSE 100 Outperform By Investing.com - May 10, 2021

By Peter Nurse  Investing.com - European stock markets traded in a mixed fashion Monday, with the heavyweight miners helping the U.K. market outperform after Friday’s disappointing...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (11)
William Bailey
William Bailey May 04, 2021 12:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
“It’s the final countdown”! Fed can only stall out the economy with inflation if they print the 6 trillion needed to pump markets ... but increased cashflow for diminishing returns will require 10-12 trillion next year
Edward Chong
Edward Chong May 04, 2021 12:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
its juz a normal correction. are u overreacting?
alex gallegos
alex gallegos May 04, 2021 12:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
There's no "normal" anymore. Without the Fed's continuous injection the market would just collapse.
Mitchel Pioneer
Mitchel Pioneer May 04, 2021 12:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ah yes, the FED cavalry shows up at 11am with clockwork precision, as the US Ponzi Scheme, greatest investment fraud in history, continues to financially dismantle America in broad daylight.
Adam Paine
Adam Paine May 04, 2021 12:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
spot on. no need for QE of 120 Billion a month for companies posting record profits
William Bailey
William Bailey May 04, 2021 12:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Adam Paine moving forward , without stim , Fed will need to up QE to 500b this year and next year... 1 trillion the year after
Deborah Sbeghen
Deborah Sbeghen May 04, 2021 12:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
11 am CT more precisely on the Dow. I hate them.
William Bailey
William Bailey May 04, 2021 12:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Deborah Sbeghen what did the Fed do at 11AM?
Dave Jones
Dave Jones May 04, 2021 12:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
William Bailey buy everything
CT OREN
CT OREN May 04, 2021 12:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Best news of the day. Hope US market continue to decline. Let’s pray.
Mauricio Carlezzo
Mauricio Carlezzo May 04, 2021 12:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why?
Cristian Cuevas
Cristian Cuevas May 04, 2021 12:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Mauricio Carlezzo Because you'll buy cheaper!
Alan Rice
Alan Rice May 04, 2021 12:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What "tech" ??
Vitaly Murashov
Vitaly Murashov May 04, 2021 12:07PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
bulls.. just another excuse for manipulation
Jacob Steinschlag
Jacob Steinschlag May 04, 2021 9:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
There are no mega cap growth stocks. A growth stock has, by definition, to be small.
Grga Cvarak
Grga Cvarak May 04, 2021 9:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hahaha,  when big boys shorting, that we call stock rotation :D
Hardik Patel
Hardik Patel May 04, 2021 9:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
will dow jones 34100 ? today
Hardik Patel
Hardik Patel May 04, 2021 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
will market come in plus +
Jon Bal
Jon Bal May 04, 2021 9:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the 2pm indicator will prevail
Hardik Patel
Hardik Patel May 04, 2021 9:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
will market come.in positive
Ab Khan
Ab Khan May 04, 2021 8:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
O ok
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email