Market NewsSubmitted by AMSG on March 29th, 2018
Markets finished lower for a second straight day on Wednesday. The decline was fueled by a selloff in tech stocks which failed to recover from the steep losses witnessed in the previous session. Amazon suffered the most, while other tech stocks such as Apple, and Netflix also took a beating. Further, Tesla’s shares plummeted following a credit downgrade and news of officials investigating a fatal crash in California.
Investors, in the meantime, digested a U.S. Commerce Department report of the U.S. economy slowing less than previously reported in the fourth quarter. Per the latest report from the Commerce Department, the U.S. GDP advanced at 2.9% annual rate of growth versus the last quarter’s figure of 2.5%. However, consumer spending witnessed its fastest quarterly growth in three years.
The Dow Jones Industrial Average (DJI) declined less than 0.1%, to close at 23,848.42. The S&P 500 fell 0.3% to close at 2,605. The Nasdaq Composite Index closed at 6949.23, shedding 0.9%. A total of 6.96 billion shares were traded on Wednesday, lower than the last 20-session average of 7.36 billion shares. Advancers outnumbered decliners on the NYSE by a 1.12-to-1 ratio. On Nasdaq, a 1.22-to-1 ratio favored declining issues.
How did the Benchmarks Perform?
The Dow declined 9.29 points in an otherwise choppy trading session, switching in and out of the positive territory 29 times. The 30-stock exchange at its session high rose as much as 234.76 points and fell 129.04 points at the lows.
The S&P 500 declined 7.62 points to close in the red, while the tech-heavy Nasdaq fell 59.58 points as most tech majors Amazon.com, Inc. (AMZN), Netflix, Inc. (NFLX) and Apple Inc. (AAPL) pulled back. Amazon has a Zacks Rank #3 (Hold).
Amazon Suffers on Trump Fears, Other Tech Stocks Decline
Amazon’s shares declined on reports that President Donald Trump has indicated that he wanted to rein in the e-commerce giant. The report said that Trump wants to “go after” Amazon, which saw company’s shares declining by as much as 6.7%, losing more than $53 billion in market value. The stock later recovered a bit to close the day down 4.4%.
Other major tech stocks too took a beating with Apple declining 1.1% after Goldman Sachs lowered its iPhone sales estimates in March and for the June quarter. Netflix also sank 4.9%. Concerns are mounting for other tech companies as well. Tesla, Inc.’s (TSLA) shares plummeted 7.7% following a credit downgrade and on news that officials are investigating a fatal car crash that took place in California last week.
The heavy decline in tech stocks saw The Technology Select Sector SPDR fund (XLK) briefly entering correction territory on Wednesday, before closing 0.7% lower.
- lululemon athletica inc.’s (LULU) shares increased 9.2% after reporting fourth-quarter fiscal 2017 adjusted earnings of $1.33 per share, surpassing the Zacks Consensus Estimate of $1.27
- Shares of RH (RH) rose 22.5% after reporting fourth-quarter fiscal 2017 earnings per share of $1.69, surpassing the Zacks Consensus Estimate of $1.56
- Walgreens Boots Alliance, Inc.’s (WBA) shares increased 2.5% after reporting second-quarter fiscal 2018 adjusted earnings per share of $1.73, surpassing the Zacks Consensus Estimate of $1.55
- Shares of Facebook, Inc. (FB) rose 0.5% after the company responded to the recent date-misuse scandal by unveiling changes to its data and privacy tools