Stocks traded choppily Thursday and turned sharply negative, as a temporary resurgence in technology shares lost steam. Each of the three major indices sank more than 1.2%.
The big tech and software stocks pummeled over the past week fell anew, with shares of Apple, Microsoft and Netflix each lower by more than 2.5%. A day earlier, these and other tech stocks led the Nasdaq to its best one-day gain since April. However, the index remained lower by about 5% for September to date.
The short-lived rally Wednesday came in absence of any major catalysts, as investors swooped in to purchase shares following the steep declines of the past several sessions. As of its closing price on Tuesday, the Nasdaq had fallen 10% from its recent record high last week, sending it into correction territory.
“Much like there was no real reason for the drop the past three days, there was no main driver for [Wednesday’s] huge rally, other than stocks were quite oversold,” Burt White, chief investment officer for LPL Financial, said in an email Wednesday. “As the election nears, we could see this continued volatility continue.”
In assessing the damage over the past few days, many analysts argued that US equities – and tech and growth shares especially – were due to be knocked from their highs. The roller-coaster trading over the past few days came after trades in tech shares had become increasingly crowded, as investors sought out shares of companies viewed as most resilient during the pandemic. Even with the volatility over the past week, the Nasdaq remained higher by 24% for the year to date through Wednesday’s close, and the S&P 500’s information technology sector was up 27% to outperform every other major sector.
“Signs of uneasiness and stretched positioning in the options market have been visible in recent weeks, with the put/call ratio collapsing, an extremely steep front-end VIX term structure, and unprecedented volumes of options traded in tech companies, particularly calls,” Alastair Pinder, global equity strategist for HSBC, said in a note Wednesday.
“Indeed, given the unprecedented scale of options traded for the [big-tech] FAANGMs ($200 billion notional volume a day in August, vs. $70 billion at the beginning of January), it is unlikely that the recent volatility has completely cleansed positioning,” he added.
Here were the main moves in markets as of 4:03 p.m. ET:
2:37 p.m. ET: Stock losses accelerate in whipsaw session; Nasdaq drops 1.5%
The three major indices sold off further Thursday afternoon, and tech stocks continued their descent.
Here were the main moves in the three major indices, as of 2:37 p.m. ET:
S&P 500 (^GSPC): -45.39 points (-1.34%) to 3,353.57
Dow (^DJI): -313.84 points (-1.12%) to 27,626.63
Nasdaq (^IXIC): -166.87 points (-1.49%) to 10,976.88
12:56 p.m. ET: Dow turns negative and drops 150 points as early gains evaporate
The three major indices sank Thursday afternoon, wiping out gains from earlier in the trading day.
The Dow fell 126 points, or 0.5%, shortly before 1 p.m. ET, with the index dragged down by declines in shares of Caterpillar and UnitedHealth Group. The S&P 500 sank 0.4%, or 14.21 points. Nasdaq outperformed but was still lower by 0.09%.
11:27 a.m. ET: Stocks fluctuate, paring earlier advances as tech loses steam
The three major indices briefly turned negative Thursday morning before recovering, as volatility continued in equity markets.
The S&P 500 was higher by 0.2% around 11:30 a.m. ET, after rising as much as 0.8% earlier. The Dow at session highs had added as many as 234 points, or 0.8%, before cutting its gains to just 36 points, or 0.1%.
The Nasdaq outperformed slightly, rising 0.7% or 76 points intraday. The consumer discretionary, communication services and information technology sectors each outperformed in the S&P 500.
9:33 a.m. ET: Stocks open higher as rally resumes
Here were the main moves in markets, as of 9:32 a.m. ET:
S&P 500 (^GSPC): +18.83 points (+0.55%) to 3,417.79
Dow (^DJI): +157.74 points (+0.56%) to 28,098.21
Nasdaq (^IXIC): +120.96 points (+1.09%) to 11,262.84
Crude (CL=F): -$0.24 (-0.63%) to $37.81 a barrel
Gold (GC=F): +$14.30 (+0.73%) to $1,969.20 per ounce
10-year Treasury (^TNX): +0.7 bps to yield 0.71%
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