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Technology Stocks Lead The Way Lower On Wall Street

wallstreet july24 10may21 lt

Stocks moved mostly lower over the course of the trading session on Monday, with technology stocks leading the way to the downside. The Dow reached a record intraday high in morning trading but joined the tech-heavy Nasdaq in negative territory as the day progressed.

The major averages all finished the day lower, although the Nasdaq underperformed its counterparts by a wide margin.

The Nasdaq plunged 350.38 points or 2.6 percent to 13,401.86, while the S&P 500 slid 44.17 points or 1 percent to 4,188.43 and the S&P 500 edged down 34.94 points or 0.1 percent to 34,742.82.

The steep drop by the Nasdaq came amid weakness among technology stocks following negative analyst comments about several big-name companies.

Google parent Alphabet (GOOGL) and Facebook (FB) posted notable losses after Citi downgraded both stocks to Neutral from Buy.

Oracle (ORCL) also moved to the downside after Barclays downgraded its rating on the business software giant's stock to Equal Weight from Overweight.

Goldman Sachs chief U.S. equity strategist David Kostin has also warned about the potential negative impact on the earnings of big-name tech companies if President Joe Biden's corporate tax plan were fully enacted.

Concerns about the outlook for inflation may also have weighed on the markets amid an increase in commodities prices.

Sector News

Semiconductor stocks showed a substantial move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 4.7 percent to its lowest closing level in well over a month.

Brooks Automation (BRKS), CMC Materials (CCMP) and Lattice Semiconductor (LSCC) turned in some of the sector's worst performances.

Significant weakness also emerged among oil service stocks, as reflected by the 3 percent slump by the Philadelphia Oil Service Index. The index reached a two-month intraday high in early trading but pulled back sharply as the day progressed.

The downturn by oil service stocks came after a cybersecurity attack forced the shutdown of the largest fuel pipeline in the U.S.

Computer hardware, software and biotechnology stocks also saw considerable weakness on the day, contributing to the steep drop by the tech-heavy Nasdaq.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index climbed by 0.6 percent, while China's Shanghai Composite Index rose by 0.3 percent.

Meanwhile, the major European markets turned in a lackluster performance on the day. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index both closed nearly unchanged.

In the bond market, treasuries turned lower over the course of the session after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.6 basis points to 1.602 percent.

Looking Ahead

Amid another quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to the latest earnings news.

AMC Entertainment (AMC), Beyond Meat (BYND), Dropbox (DBX), Expedia (EXPE), GoPro (GPRO), Live Nation (LYV), Peloton (PTON), Roku (ROKU), and Yelp (YELP) are among the companies releasing their quarterly results after the close of today's trading.

Cigna (CI), DraftKings (DKNG), and Fluor (FLR) are also among the companies due to report their quarterly results before the start of trading on Tuesday.

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