Stocks fell on Friday to end a volatile week as investors continued to dump shares of high-flying tech companies.
The Dow Jones Industrial Average slid 370 points, or more than 1%. The S&P 500 dropped 1.7% and the Nasdaq Composite fell 2.2%.
Those losses put the major averages on track for their third straight one-week losses, which would be their longest weekly losing streaks in about a year. The S&P 500 and Nasdaq were down more than % each week to date; the Dow has lost 0.3% in that time. The S&P 500 also hit its lowest level this month after reaching an all-time high on Sept. 2.
Shares of Apple dropped more than 3%. Microsoft and Alphabet also pulled back by more than 3% along with Amazon. Netflix slipped 2.3%. Facebook was down by 1.5%. Oracle, meanwhile, slipped 1.1% after the U.S. government said it will block all TikTok and WeChat downloads in the country on Sunday. Oracle is trying to take a minority stake in TikTok-parent ByteDance.
Big Tech is down broadly week to date. Facebook and Amazon have each dropped more than 5.5% week to date. Alphabet, Netflix, Apple and Microsoft are also down sharply over that time period. For the month, all six stocks are down more than 11%. Apple, specifically, has plunged more than 17% in September.
The S&P 500 tech sector was down 2.6% and was on pace for its first three-week losing streak since September 2019.
“We’re seeing short-term under performance from these stock but also outperformance over the long term,” said Mark Travis, CEO of Intrepid Capital. However, he noted that tech’s struggles are likely to be short-lived. Many of these companies “generate a lot of cash and have impenetrable balance sheets. They are also ubiquitous in terms of people’s use of them.”
Friday’s moves come as a series of individual stock, ETF and index options are set to expire. This could lead to volatile trading as small and large investors alike unwind these positions ahead of the expirations.
Wall Street was also coming off a sharp drop in the previous session as investors were on edge about the outlook on further coronavirus stimulus as well as the timing of a viable vaccine. Republicans and Democrats are still struggling to agree on how much aid to continue to provide in a follow-up bill to the previous $2 trillion package. President Donald Trump said Wednesday he liked “the larger numbers,” urging GOP lawmakers to go for a bigger coronavirus stimulus, but his comments left Republicans skeptical.
“The signs point to a decelerating U.S. economic recovery and increasing thematic risks,” analysts at MarketDesk Research said in a note. “It feels as if the bullish market narrative is changing in real time. Given all of the headline risks, we would error on the side of caution in the coming months.”
Meanwhile, the path to a Covid-19 vaccine, which is critical to the economic recovery, still seems unclear. Health officials said vaccinations would be in limited quantities this year and not widely distributed for six to nine months.
“A safe and transparent vaccination process is critical to encouraging widespread inoculations once effective vaccines are identified and tested.” Mark Haefele, UBS Global Wealth Management’s chief investment officer, said in a note. “In our central scenario, we expect widespread vaccine availability by 2Q21.”
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Stocks fell on Friday to end a volatile week as tech struggled once again to find its footing recover from its September losses.