Tech slump leads US stocks lower
King Digital Entertainment CEO and founder Riccardo Zacconio second left, high-fives with company co-founder Lars Markgren, the maker of Candy Crush Saga and Farm Heroes Saga, during opening bell ceremonies at the New York Stock Exchange, before King Digital’s IPO on Wednesday, March 26, 2014. The stock market finished lower Wednesday with technology names tumbling the most after the market snubbed a Facebook acquisition announcement and King Digital’s first day of trade as a public company. AP
NEW YORK—US stocks Wednesday finished lower with technology names tumbling the most after the market snubbed a Facebook acquisition announcement and King Digital’s first day of trade as a public company.
The Dow Jones Industrial Average fell 98.89 (0.60 percent) to 16,268.99.
The broad-based S&P 500 declined 13.06 (0.70 percent) to 1,852.56, while the tech-rich Nasdaq Composite Index sank 60.69 (1.43 percent) to 4,173.58.
Michael James, managing director of equity trading at Wedbush Securities, said some tech investors were skeptical after Facebook announced a $2 billion deal to buy virtual reality company Oculus so soon after it announced a deal to buy WhatsApp for $19 billion.
Facebook shares fell 6.9 percent.
Investors also frowned on Candy Crush creator King Digital, which slumped 15.6 percent on its first day of trade after raising $500 million in an IPO. Shares closed at $19, well below the IPO price of $22.50.
King’s decline also depressed other videogame developers, including Zynga (-4.1 percent) and Electronic Arts (-2.5 percent).
“It’s been an ugly time for tech stocks over the last week or so,” James said.
The decline in tech names was fairly broad-based and included Google (-2.3 percent), Amazon (-3.2 percent) and Tesla Motors (-3.4 percent.) An exception was software company Oracle, which rose 1.8 percent.
Most of the companies in the Dow dropped. Exceptions were pharmaceuticals Merck (+1.5 percent) and Pfizer (+1.1 percent).
News Corp. fell 1.9 percent while 21st Century Fox dipped 1.1 percent after global media titan Rupert Murdoch named his son Lachlan Murdoch as vice president of both firms, a possible sign of who will lead them when the father, 83, retires.
A report that Dish Network and DIRECTV could merge lifted both companies. Dish jumped 6.3 percent, while DIRECTV rose 5.7 percent.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.70 percent from 2.73 percent Tuesday, while the 30-year declined to 3.55 percent from 3.57 percent. Bond prices and yields move inversely.
