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S&P 500 Starts Week With Selloff as Investors Ditch Tech

Stock MarketsOct 04, 2021 04:12PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 closed lower Monday, as investors continued to abandon tech at a time when rates continue to climb and inflation is expected to remain elevated.      

The S&P 500 fell 1.3%, the Dow Jones Industrial Average slipped 0.9% or 323 points, the Nasdaq was down 2.1%.

Facebook (NASDAQ:FB), down 5%, led the slump in tech after a Facebook whistle-blower named Frances Haugen alleged that the social media company prioritizes profit over the well-being of its users.  

The news brought the regulatory spotlight back onto the social media companies, with Twitter (NYSE:TWTR) and Snap (NYSE:SNAP) falling more than 5%.

The selloff in tech was exacerbated by a further malaise in sentiment on growth stocks as investors price in higher rates and inflation.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL) fell more than 2%.

Growth stocks like tech, with high valuations, tend to cash flow that extend further out into the future, which is unattractive in an inflationary environment.

Health care also contributed to the sea of red on Wall Street, led by Moderna (NASDAQ:MRNA) as investors continued to ditch the stock following positive news of Merck’s late-stage trial for their new anti-viral pill.

Energy stocks bucked the trend, underpinned by rising oil prices after OPEC+ decided to stick with an existing agreement to hike oil output by 400,000 barrels per day in November.

Sentiment on Wall Street was also soured by ongoing uncertainty in Washington on several fronts including the need to raise the debt ceiling before the Oct. 18, to avoid the U.S. defaulting on its debt.

In other news, auto stocks rose, with Tesla and General Motors in the ascendency.

General Motors (NYSE:GM) climbed 1.6% after Engine No. 1, an activist hedge fund, said it had bought a stake in the company, citing optimism over the its electric vehicle expansion plans.  

Tesla (NASDAQ:TSLA), meanwhile, was up 0.8% after reporting that vehicles in Q3 swelled to a record high despite the ongoing chip-supply shortage that is weighing on the activity in the industry.

"We note the company's supply change management and flexible operating system appear to be serving the company well as demand continues to outstrip supply," Oppenheimer said in a note.

S&P 500 Starts Week With Selloff as Investors Ditch Tech
 

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Comments (16)
Darryl Allen
Darryl Allen Oct 05, 2021 3:55AM ET
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Someone's opinion about Facebook is considered whistle blowing?
Leo San
Leo San Oct 04, 2021 8:13PM ET
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Watch it pop on the next 2-3 days lol! Buy red!! Oversold in alot tech
dog log
dog log Oct 04, 2021 8:13PM ET
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might as well bet on horses at this point.  At least the horse that wins the race is more predictable if you have an experience unlike stocks at this point.
Miles Mathewson
Miles Mathewson Oct 04, 2021 8:03PM ET
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About time for tech to crash....was running on fumes for years. time for oil to hit $200
ZS Beck
ZS Beck Oct 04, 2021 7:59PM ET
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Banana republic here we come. Another 5T package and a loaf of bread will be 1000$...
Mike Brarey
Mike Brarey Oct 04, 2021 6:54PM ET
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Short tech
Louis Lipps
Louis Lipps Oct 04, 2021 6:29PM ET
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What's the fuss?  My portfolio was up 2% average today.  Oil will hit an all time high during this current administration.  At some point.
New Jazenevd
New Jazenevd Oct 04, 2021 6:13PM ET
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Money printing continues. Every dip is a buying opportunity. Cash loses value daily. Inflation.
Ali Scander
Ali Scander Oct 04, 2021 5:27PM ET
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People be saying buy the dip for the past month. This ain't buy the dip, it's more like hold your hard earned cash. Wait for market to go down more as it should, buy again when things looks like they are getting better. Evergrande, Debt Ceiling, Energy prices, Inflation. All these events have caused market to go down. Might go down more by mid October considering the way things are looking. I would not be buying the dip yet lol.
Sari xx
Sari xx Oct 04, 2021 5:27PM ET
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Been buying throughout September & will continue in October. Stocks are anyways better than cash.
Sari xx
Sari xx Oct 04, 2021 5:27PM ET
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By the time it gets better, you have missed the ride bro
Ali Scander
Ali Scander Oct 04, 2021 5:26PM ET
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People be saying buy the dip for the past month. This ain't buy the dip, it's more like hold your hard earned cash. Wait for market to go down more as it should, buy again when things looks like they are getting better. Evergrande, Debt Ceiling, Energy prices, Inflation. All these events have caused market to go down. Might go down more by mid October considering the way things are looking. I would not be buying the dip yet lol.
Mitchel Pioneer
Mitchel Pioneer Oct 04, 2021 5:04PM ET
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More flagrant, criminal intervention today.  DOW hand placed above 34K at the close, and S&P hand placed above 4.3K.  Just how much more of a joke can this market get?
Meru Pet
Meru Pet Oct 04, 2021 5:00PM ET
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i like money
Fernando Lazarini
Fernando Lazarini Oct 04, 2021 4:48PM ET
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Treasuries were not that high today to explain this selloff.
Mario tragik
Mario tragik Oct 04, 2021 4:47PM ET
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Then magically at the end of the week those losses are erased.
Ruzi Ayijiamali
Ruzi Ayijiamali Oct 04, 2021 4:41PM ET
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When people in panic, it’s the time to buy
Joe Thuo
Joe Thuo Oct 04, 2021 4:41PM ET
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yes..time to buy and go bankrupt
Sajjad Mansab Sajjad Mansab
Sajjad Mansab Sajjad Mansab Oct 04, 2021 4:40PM ET
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😭💵
Rasp Trade
Rasp Trade Oct 04, 2021 4:33PM ET
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Just stopUsing word investors
 
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