Tech sector extends slump, dragging stock market lower again

Wall Street’s fear gauge crossed its 200-day moving average to hit its highest level in seven weeks

Wall Street’s fear gauge crossed its 200-day moving average to hit its highest level in seven weeks

While data Thursday showed applications for jobless claims fell last week, USA investors may need evidence of a fuller economic recovery after a 60% run-up in the S&P 500 since its March lows.

The Dow Jones Industrial Average fell 580 points at one point during morning trading, while the S&P 500 retreated 2.3%.

The S&P 500 Index fell 0.7 per cent at 2:40 p.m.

Declining issues outnumbered advancing ones on the NYSE by a 4.14-to-1 ratio; on Nasdaq, a 4.20-to-1 ratio favored decliners.

"(Investors) are in love with tech stocks and it's going to take more than this for them to fall out of love with them", said Mike Zigmont, head of trading and research at Harvest Volatility Management in NY.

The Nasdaq Composite lost 145 points or 1.27% percent Friday and was down 3.27% for the week. Netflix and Microsoft slipped 1.8 percent and 1.4 percent, respectively.

Nasdaq had powered the stock market's stellar recovery from the coronavirus-led crash, climbing as much as 82% from March lows while the benchmark S&P 500 and Dow had surged about 60% from their troughs.

A reversal in high-flying tech stocks sent major indexes sharply lower Thursday.

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'The data is consistent with an improving labor market that is helping to support consumption, but remains a long way away from pre-COVID-19 levels, ' said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

The Dow, meanwhile, has fallen 1.1% this week.

The U.S. unemployment rate previously soared to a record 14.7 percent in April. The U.S. economy has recovered about half the 22 million jobs lost to the pandemic.

The S&P index recorded no new 52-week highs and no new low, while the Nasdaq recorded 18 new highs and 77 new lows.

Big Tech companies have made outsize gains in recent months as investors bet that they would continue posting huge profits even with many coronavirus restrictions still in place as people spend even more time online with their devices. Analysts say that move has turbocharged the tech sector, whose sheer size drives broader market swings. And yet, Apple is still up 64.8% this year, while Amazon is up 78.3%.

Stock indexes in Europe fell, shedding early gains. Hopes also remain that Congress and the White House will come up with another economic relief package. Nvidia fell 3%, though the chipmaker is still up more than twofold this year. The euro edged higher to $1.1854 from $1.1852.

West Texas Intermediate crude declined 0.6% to $41.12 a barrel.Gold was at $1,936.72 an ounce, up 0.3%.

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