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Wall Street Falls at Open as Valuation Concerns Resurface; Dow Down 230 Pts

Stock MarketsFeb 18, 2021 09:47AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets fell sharply at the opening on Thursday, after an unexpected rise in weekly jobless claims sparked fears that trades anticipating an economic recovery in the course of the year may have gone too far, too fast. 

By 9:45 AM ET (1445 GMT), the Dow Jones Industrial Average was down 231 points, or 0.7%, at 31,382 points. The S&P 500 was likewise down 0.7% and the Nasdaq Composite was down 1.0%.

Earlier, the Labor Department had said initial jobless claims rose to 861,000 last week, instead of falling to 765,000 as expected. The news blunted the optimism that had been prompted by a strong retail sales report for January, which had been released on Wednesday. The figures suggested that the sharp rise in consumer spending enabled by stimulus checks was masking a much more severe weakness in the labor market, a point made repeatedly by Federal Reserve officials in recent weeks. 

Early trade was also overshadowed by a weaker-than-expected report from Walmart (NYSE:WMT). The big-box retailer's stock fell 6.1% after the company said sales will hardly grow in the next 12 months, after posting a solid 8% rise in the 12 months through January.

Tesla (NASDAQ:TSLA) stock and Apple (NASDAQ:AAPL) stock, both favorites of tech investors in recent years, also slipped by 1.7% and 1.0% respectively amid signs of rotation out of a sector that is richly priced and into names with less stretched valuations. Such rotations had appeared to gain an important endorsement earlier this week in Berkshire Hathaway (NYSE:BRKa)'s latest investment report, which showed that Warren Buffett's firm had trimmed its exposure to Apple and redeployed some of the proceeds to Chevron (NYSE:CVX), Verizon Communications (NYSE:VZ) and insurance company Marsh & McLennan  (NYSE:MMC).

Chevron and other energy stocks gave up some of the gains they had posted in the wake of the spike in natural gas and oil prices that has been caused by the cold snap in Texas and other states.

Among other movers, Facebook (NASDAQ:FB) stock fell 2.0% after the company's dispute with the Australian government over a new law that forces it to pay publishers for the news it carries took another twist. The social media giant blocked government information on the pandemic along with Australian media reports as it suspended the sharing of news, opening itself up to a fresh angle of criticism. 

One standout gainer was Twilio (NYSE:TWLO) stock. The cloud computing company stock rose 7.5% to a new all-time high after reporting better than expected earnings after the bell on Wednesday and upholding its forecast for 30% annual growth over the next four years. Before the results, the company - which still expects to be loss-making in the current quarter - was valued at over 30 times trailing 12 months sales. 

Wall Street Falls at Open as Valuation Concerns Resurface; Dow Down 230 Pts
 

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Comments (14)
Oliver Brecht
Oliver Brecht Feb 19, 2021 6:59AM ET
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simple question, who is buying?
Art Fire
Art Fire Feb 19, 2021 12:10AM ET
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I needed a pull back so I can buy a few. Thank you!
Bulls MakeMore
Bulls MakeMore Feb 18, 2021 2:30PM ET
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Buy good companies at reasonable prices and hold LONG....the rest is foolish
AmericaIsKing oftheGalaxy
AmericaIsKing oftheGalaxy Feb 18, 2021 11:33AM ET
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There was a time business paid travelling vacuum sale men could make enough to feed their families and kive in dignity because the owners made enough to live well. Now owners make enough to feed their own families for 10,000 years and vacuum salesmen starve. Strange how that works.
michael engel
michael engel Feb 18, 2021 10:43AM ET
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1) When the Ox saw red he attacked. That's what happened today to the SSEC. 2) New year stimulus under a forceful stay home restrictions, during the new year celebration, sent bored speculators to the stock markets. SSEC closed down 60 pt in a selling bar on a higher volume. 2) Cold weather attacked the climate change fanatic gang. 3) The sun is hiding from them and the wind turbines are frozen. 4) NYC & SF RE plunged a year ago. The flyover states RE is frozen. Housing start will not be completed due to bad economic.
AmericaIsKing oftheGalaxy
AmericaIsKing oftheGalaxy Feb 18, 2021 10:43AM ET
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Stay off drugs kids
Kaveh Sun
Kaveh Sun Feb 18, 2021 10:38AM ET
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How nice, if the stock is a tril earning and goes up, news said it is growth, future. If the stock goes down, they say it is valuation.
AmericaIsKing oftheGalaxy
AmericaIsKing oftheGalaxy Feb 18, 2021 10:31AM ET
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Fundamentals only matter when its not them buying things like livenation
ZS Beck
ZS Beck Feb 18, 2021 10:25AM ET
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Valuations? I do not know this word. I thought all the worthless no money-making companies are up to date with the earnings/ valuations. The burning money faster as the FED can print it.
Casador Del Oso
Casador Del Oso Feb 18, 2021 10:17AM ET
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Where's that stimulus Joe? What's taking so long?
Adrian White
Adrian White Feb 18, 2021 10:17AM ET
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Senate Republicans are what's making it take so long.
AG MA
AG MA Feb 18, 2021 10:17AM ET
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Hmmm the Dems have majority in Congress....yet its still the pesky republicans' fault? Oh if only this great nation was united under one party. we would be saved....
Russell Amerio
Russell Amerio Feb 18, 2021 10:15AM ET
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worried about valuations. They are cool with TSLA be 900 times earnings and Zoom being 1200 times earnings. When was the last time they cared about valuation?
jean jean
jean jean Feb 18, 2021 9:58AM ET
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Rather, it sells AAPL Buffet and suddenly AAPL doesn't look so attractive anymore .... :)
Alberto Vazquez
Alberto Vazquez Feb 18, 2021 9:56AM ET
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Should be up. More unemployment more stimulus money. More to gamvest.
Alcidio Tivane
Alcidio Tivane Feb 18, 2021 9:55AM ET
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Logan hoff
Logan hoff Feb 18, 2021 9:54AM ET
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why no go up :(
 
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