Stock Market Today: Tech Stocks Tank in Stunning Market Downturn
2020's biggest winners turned tail Thursday in a widespread selloff that saw Apple (AAPL), Microsoft (MSFT) and other tech names sink.
The recent run to breathtaking stock valuations finally gave way in a big way Thursday. Despite little in the way of troubling macroeconomic triggers, the major indices started significantly lower and continued to weaken throughout the session.
Last week's jobless claims weren't disastrous – the seasonally adjusted 881,000 claims were 130,000 less than a week before, but much of the decline was chalked up to a change in the Labor Department's methodology.
"Since the Labor Department will only apply the new seasonal adjustment process to data beginning with this week's claims report and not adjust prior data, it injects uncertainty about how to interpret the week-to-week change in initial and continuing claims," write Barclays Investment Bank’s Michael Gapen and Pooja Sriram. "Altogether, while this week's jobless claims data, if taken at face value, point to a further improvement in labor market conditions, the introduction of new seasonal adjustment factors mean it is difficult to assess the degree to which conditions improved."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But Thursday's selling was vicious nonetheless, and worst among some of this year's biggest winners. Apple (AAPL, -8.0%), Amazon.com (AMZN, -4.6%), Microsoft (MSFT, -6.2%) and Tesla (TSLA, -9.0%) combined to shed about $440 billion worth of market value in one day, according to YCharts data, powering the Nasdaq Composite 5.0% lower to 11,458 in its worst single-day loss since June.
Other action in the stock market today:
- All but two Dow Jones Industrial Average components declined in a 2.8% loss for the Dow, to 28,292.
- Only about 11% of the companies in the S&P 500 (-3.5% to 3,455) finished in the black.
- The small-cap Russell 2000 wasn't immune to the selling, shedding 3.0% to 1,544.
An Off Day, Or an Omen?
Reactions from the Wall Street community were unsurprisingly mixed, with views of today ranging anywhere from "blip" to "start of a major correction."
"This market has been due for a pullback," says Bankrate.com Chief Financial Analyst Greg McBride. "Actually, overdue. Putting today’s market pullback in context, this takes the S&P 500 all the way back to where it was – wait for it – last Wednesday. ... Volatility is normal and investors should be braced for more of it as we head closer to the election, and with valuations at high levels."
David Bahnsen, chief investment officer of California-based wealth manager The Bahnsen Group, says this might not necessarily be the start of a single-direction move for the entire market.
"Thursday's declines could very well be the start of the inevitable Nasdaq correction, but no one has any way of knowing that," he says. "So far, the move downward is rather hum-drum and immaterial.
“Down days where you see some of the financials and energy and REIT names up despite the Dow down 2.5% and Nasdaq down 5% clearly indicates rotation, not capitulation," adds Bahnsen, who encourages buying dips in energy stocks and financial firms.
But investors can't be blamed for being on red alert, given still-high unemployment and a still-growing number of corporate bankruptcies in the wake of COVID-19. Just know your options.
You can always take some chips off the table, as long as you know the ins and outs of raising cash. And if you are going to sell, consider checking out what Wall Street's "smart money" has been casting aside. Lastly, remember: While bonds – which you can access via these 12 bond mutual funds and ETFs – aren't generating much yield these days, they can still provide a bit of income while helping to insulate you from wilder swings in stocks.
Disclaimer
Kyle Woodley was long AMZN and MSFT as of this writing.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
-
Having Enough Money for Retirement Still a Top Concern, But Moods Are Changing
A new Gallup poll shows Americans are still concerned about having enough money for retirement, but there are some changes from last year.
By Alexandra Svokos Published
-
Warren Buffett Adores Apple as Much as Ever
Berkshire Hathaway trimmed its Apple stake because taxes are "likely" to go up "later."
By Dan Burrows Published
-
Warren Buffett Adores Apple as Much as Ever
Berkshire Hathaway trimmed its Apple stake because taxes are "likely" to go up "later."
By Dan Burrows Published
-
Stock Market Today: Stocks Soar on Apple Buyback News, Jobs Data
The main indexes rallied hard to end the week thanks to Apple's $110 billion stock repurchase plan and a big April payrolls miss.
By Karee Venema Published
-
Stock Market Today: Stocks Sizzle Ahead of Apple Earnings, Jobs Report
The Nasdaq outperformed in a strong day for stocks thanks to Qualcomm's post-earnings pop.
By Karee Venema Published
-
Stock Market Today: Stocks Pop Then Drop After Fed Meeting
Stocks went on a roller-coaster ride after Fed Chair Powell said interest rates were likely at a sufficiently restrictive level.
By Karee Venema Published
-
Fed Holds Rates Steady at 23-Year High: What the Experts Are Saying
Federal Reserve The Federal Reserve struck a dovish pose even as it kept interest rates unchanged for a sixth straight meeting.
By Dan Burrows Published
-
Amazon Stock Jumps as Cloud Growth Fuels Blowout Quarter
Amazon beat expectations for the first quarter and the Dow Jones stock is soaring. Here's what you need to know.
By Joey Solitro Published
-
Stock Market Today: Stocks Sell Off Ahead of Fed Decision
Stocks sold off sharply Tuesday as anxiety set in ahead of Wednesday's policy statement from the Federal Reserve.
By Karee Venema Published
-
Stock Market Today: Markets Post Broad-Based Gains Thanks to Mega-Cap Tech
Stocks get help from a couple of laggard Magnificent 7 stocks.
By Dan Burrows Published