Tech Giants Slide, Pulling Stocks Lower11/12 16:08
A broad sell-off in technology companies pulled U.S. stocks sharply lower
Monday, knocking more than 600 points off the Dow Jones Industrial Average.
(AP) -- A broad sell-off in technology companies pulled U.S. stocks sharply
lower Monday, knocking more than 600 points off the Dow Jones Industrial
The wave of selling snared big names, including Apple, Amazon and Goldman
Sachs. Banks, consumer-focused companies, and media and communications stocks
all took heavy losses. Crude oil prices fell, erasing early gains and extending
a losing streak to 11 days.
The tech stock tumble came followed an analyst report that suggested Apple
significantly cut back orders from one of its suppliers. That, in turn, weighed
"With the news out of the Apple supplier this morning, you have the market
overall questioning the growth trajectory as we look out to 2019," said Lindsey
Bell, investment strategist at CFRA. "We continue to like tech going into next
year, but we think it could be a little bit of a rocky period for the group as
we continue through the last two months of the year."
The market's slide came after a two-week winning streak.
The S&P 500 index dropped 54.79 points, or 2 percent, to 2,726.22. The Dow
fell 602.12 points, or 2.3 percent, to 25,387.18. It was down briefly by 648
The Nasdaq composite slid 206.03 points, or 2.8 percent, to 7,200.87. The
Russell 2000 index of smaller companies gave up 30.70 points, or 2 percent, to
Bond trading was closed for Veterans Day. Stocks in Europe also suffered
Apple tumbled 5 percent to $194.17 after Wells Fargo analysts said the
iPhone maker is the unnamed customer that optical communications company
Lumentum Holdings said was significantly reducing orders. Shares in Lumentum
plunged 33 percent to $37.50.
Several chipmakers also fell. Advanced Micro Devices gave up 9.5 percent to
$19.03, while Nvidia lost 7.8 percent to $189.54. Micron Technology gave up 4.3
percent to $37.44.
Amazon slid 4.4 percent to $1,636.85.
Banks and other financial companies also took heavy losses Tuesday. Goldman
Sachs slid 7.5 percent to $206.05.
"Expectations are really that the deregulation process that has benefited
banks up to this point is going to be slowed down with the Democrats in
charge," Bell said.
Stocks appeared to have regained their footing after a skid in October
snapped a six-month string of gains for the S&P 500. Stocks rallied last week
after the U.S. midterm elections turned out largely as investors expected, with
a divided Congress promising legislative gridlock in Washington the next couple
While the market has typically thrived in periods of divided government,
investors continue to grapple with uncertainty over the U.S.-China trade
dispute and the potential impact of increased oversight of Corporate America by
Democrats, who will be taking over leadership in the House of Representatives
In addition, some companies have recently reported third-quarter earnings
and outlooks that have stoked investors' worries about the future growth of
While companies got a boost this year from the lower tax rates put in place
by President Donald Trump and the GOP last December, several companies have
recently warned about the impact of higher costs related to tariffs and rising
"The bull market is not over, the economic expansion is not over, but things
are starting to wind down," said Randy Frederick, vice president of trading &
derivatives at Charles Schwab. "We're clearly getting into the late innings of
the ball game."
British American Tobacco, which makes Newport cigarettes, plunged 8.8
percent to $38.08 on reports that regulators were considering a ban on menthol
PG&E tumbled 17.4 percent to $32.98 after the electric utility told
regulators that a high-voltage line experienced a problem near the origin of
one of the major California wildfires before the blaze started.
Investors bid up shares in Athenahealth after the struggling medical billing
software maker said it received a $5.7 billion cash buyout offer. The stock
jumped 9.7 percent to $131.97.
About 90 percent of S&P 500 companies have reported third-quarter results so
far, with some 51 percent of those posting earnings and revenue that topped
Wall Street's forecasts, according to S&P Global Market Intelligence. Several
big retailers are due to deliver results this week, including Walmart, Home
Depot, Williams-Sonoma, Nordstrom and J.C. Penney.
"That could actually probably boost the market," Bell said. "Retailers are
going to have a better third quarter than most people expect. A lot of them
ordered goods ahead of the tariffs going into place, so they're not going to
have to pass on higher prices on to the consumer this holiday season."
Benchmark U.S. crude gave up an early gain, sliding 0.4 percent to settle at
$59.93 per barrel in New York. Brent crude, used to price international oils,
dipped 0.1 percent to close at $70.12 per barrel in London. Oil futures rose
earlier on news that Saudi Arabia and other major producers planned to reduce
The dollar strengthened to 113.86 yen from 113.80 yen on Friday. The euro
fell to $1.1240 from $1.1336. The British pound weakened to $1.2853 from
$1.2975 amid concerns that Britain's government is struggling to find unity on
a Brexit deal.
Gold fell 0.4 percent to $1,203.50 an ounce. Silver lost 0.9 percent to
$14.01 an ounce. Copper slid 0.3 percent to $2.68 a pound.
In other energy trading, heating oil fell 0.8 percent to $2.16 a gallon and
wholesale gasoline gained 0.9 percent to $1.64 a gallon. Natural gas rose 1.9
percent to $3.79 per 1,000 cubic feet.
Major stock indexes in Europe also ended lower Monday. Germany's DAX lost
1.8 percent and France's CAC 40 fell 0.9 percent. Britain's FTSE 100 shed 0.7
In Asia, markets finished mixed. Japan's Nikkei 225 added 0.1 percent, while
Hong Kong's Hang Seng rose 0.1 percent. Australia's S&P-ASX 200 gained 0.3
percent. The Kospi in South Korea dipped 0.3 percent.