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US Stocks Fall; Market Down 3rd Week 09/18 16:07
Wall Street capped another turbulent week of trading Friday with a broad
slide in stocks that left the S&P 500 with its third-straight weekly loss.
(AP) -- Wall Street capped another turbulent week of trading Friday with a
broad slide in stocks that left the S&P 500 with its third-straight weekly loss.
The S&P 500 fell 1.1%, led once again by a sell-off in technology companies,
with Apple, Amazon and Alphabet weighing particularly on the market. Technology
stocks and other companies that powered the market's strong comeback this year
have suddenly lost momentum this month amid worries that they have become too
expensive.
The sell-off tempered later in the afternoon but still wiped out what had
been a solid start to the week. The S&P 500 is on track for its first monthly
loss since March. September is historically the worst month for stocks.
"The market has been poised to just pull back, take a breather," said Quincy
Krosby, chief market strategist at Prudential Financial. "Raising capital is
prudent during a month that is known statistically, historically for being
difficult for the market."
The S&P 500 fell 37.54 points to 3,319.47. The decline marks the the first
3-week losing streak for the benchmark index since last October. The Dow Jones
Industrial Average dropped 244.56 points, or 0.9%, to 27,657.42. The Nasdaq
composite shed an early gain, losing 116.99 points, or 1.1%, to 10,793.28.
Smaller stocks also fell, with the Russell 2000 index of small caps giving up
5.82 points, or 0.4%, to 1,536.78.
Stocks have swirled this week despite the Federal Reserve's saying it
expects to keep short-term interest rates at record lows through 2023. Low
rates typically turbocharge the market by encouraging investors to pay higher
prices for stocks, but some investors may have been looking for the Fed to be
even more aggressive.
Growth in some areas of the economy has also slowed after unemployment
benefits and other aid from the federal government expired, and partisan
disagreements in Congress are holding up a possible renewal of support.
Investors say it's essential that such aid arrives.
"To the extent that you don't get an additional fiscal cushion, the economy
is going to be impacted by it," said Brian Levitt, global market strategist at
Invesco.
Rising tensions between the world's two largest economies are also
continuing to keep markets on edge. The United States said on Friday that it
will ban downloads of the Chinese apps TikTok and WeChat on Sunday. It cited
national security and data privacy concerns.
President Donald Trump's targeting of the Chinese tech industry has caused
intermittent worries in the market about a possible retaliation against the
U.S. industry.
Big Tech stocks have stumbled sharply this month on worries that their
prices have grown too expensive following their virtuosic performance through
the pandemic. Surging shares of Apple, Microsoft, Amazon and others helped
carry Wall Street back to record heights, even as the pandemic walloped much of
the economy, as the coronavirus accelerated work-from-home and other trends
that benefit them.
But they suddenly lost momentum two weeks ago, causing the market to swing
with them. Because these companies have grown so massive, their stock movements
have huge sway over broad market indexes, such as the S&P 500.
"We certainly got a little short-term overbought and we headed into a time
of the year that is not great for markets," Levitt said.
On Friday, several Big Tech stocks continued slipping. Apple dropped 3.2%,
Microsoft fell 1.2% and Amazon slid 1.8%.
Also on the long list of concerns for markets is how the pandemic
progresses, whether a vaccine for COVID-19 could indeed be available in early
2021 as many investors expect and what November's U.S. presidential election
will do to the economy.
Treasury yields remain very low, showing the powerful strength of the
Federal Reserve and continued expectations by bond investors for only modest
economic growth and inflation. The yield on the 10-year Treasury rose to 0.70%
from 0.69% late Thursday.
A preliminary report on Friday said that consumer sentiment is improving at
a faster pace than economists expected, which is key for an economy where
spending by consumers is the main driver. But it follows other reports this
week that showed growth in retail sales slowed last month and the number of
layoffs across the country remains stubbornly high.
One factor that may have helped make trading bumpier than usual Friday is an
event known as "quadruple witching," which marks the expiration of futures and
options on stocks and indexes. The event can drive swings in prices.
Other stock markets around the world made mostly modest moves.
In Europe, the German DAX lost 0.7%, and the French CAC 40 sank 1.2%. The
FTSE 100 in London fell 0.7%. Markets in Asia closed mostly higher.
Benchmark U.S. crude oil fell 0.2% to $40.89 to per barrel. Brent crude, the
international standard, fell 0.8% to $42.95 per barrel.
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