US stocks sink amid tech sell-off; Nasdaq -3.0%
NEW YORK, United States – Wall Street stocks finished sharply lower on Monday, with the Nasdaq crumbling on worries about US-China trade tensions and flagging growth among tech giants.
The tech-rich Nasdaq Composite Index ended down 3.0 percent at 7,028.48.
The Dow Jones Industrial Average dropped 1.6 percent to 25,017.44, while the broad-based S&P 500 slid 1.7 percent to 2,690.73.
The declines came after a weekend Asia-Pacific Economic Cooperation summit showcased conflict between the United States and China and as fresh US housing data showed a drop in homebuilder sentiment in November. Analysts said low trading volumes at the start of a holiday-shortened week may have exacerbated the market swing.
Technology shares remained weak, with the Nasdaq’s latest plunge taking the index pullback to 13.3 percent since hitting an all-time high on August 29.
Shares of Apple fell four percent following a Wall Street Journal report on production cuts of its new iPhone models, while Facebook plummeted 5.7 percent amid negative fallout over its handling of consumer data and various other controversies that have generated scrutiny.
Other leading tech companies including Amazon, Netflix and Adobe, all fell five percent or more.
The pullback follows a blowout third-quarter earnings period. Companies in the S&P 500 are on track to earn 25.7 percent higher third-quarter profits, according to FactSet. However, many analysts expect earnings growth to slow, in part because the one-time earnings jump from US tax cuts will be gone.
Many analysts also expect US growth to slow. A Goldman Sachs forecast released Monday said a US recession was not expected but it predicted US growth would slow from a recent pace of 3.5 percent to roughly 1.75 percent by the end of 2019.
“The tightening in financial conditions and the fading of the fiscal stimulus are the key drivers of the growth deceleration we expect next year,” Goldman said.
“The slowdown should come gradually, with growth remaining above trend in the first half of 2019 before slowing to its potential pace later in the year.”
While technology shares were exceptionally weak, some multinational companies vulnerable to trade war fallout also suffered.
Boeing dived 4.5 percent and Caterpillar and Deere & Co both shed more than 3.0 percent. /cbb
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