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Dow ends day down 800 points, S&P tech sector posts worst day since March
Stocks ended Thursday’s session sharply lower, with the Dow falling more than 800 points (2.7%) and the S&P 500 dropping 3.5%. The Nasdaq Composite lost 4.9%.
Much of the session’s losses came from the technology sector, which clinched its single-worst day since March and snapped a 10-day win streak. Apple lost 8%, Microsoft shed 6% and Google-parent Alphabet declined 5.1%. — Thomas Franck
Dow tumbles 1,000 points
The equity rout gained steam in afternoon trading Thursday with the Dow plunging more than 1,000 points at its session low. The 30-stock average, dragged down by a 7.7% drop in Apple, is on track for its worst day since June. The S&P 500 fell 4%, while the Nasdaq Composite dropped 5.5%. — Yun Li
Final hour of trading: Wall Street sell-off accelerates into the close
The major averages were at their session lows with less than one hour left in the session as tech shares built on their massive losses. The Dow dropped more than 900 points, or 3.2%. The S&P 500 slid 4% and the Nasdaq Composite plunged 5.5%. —Fred Imbert
Tech sector headed for first loss in 11 sessions
The S&P 500 tech sector plummeted more than 5% on Thursday, putting the best-performing group of the market on pace to snap a 10-day winning streak. Nvidia, Qorvo and Fortinet were the worst-performing names in the sector, dropping 9%, 8.8% and 8.6%, respectively. —Fred Imbert
Tech’s pullback is ‘understandable’
Given tech’s recent run higher, David Bahnsen, chief investment officer at The Bahnsen Group, believes Thursday’s pullback makes sense.
“A pullback in tech stocks right now is understandable. The Nasdaq has advanced violently since March and many names are at absurd valuations,” he said in an e-mail. “Thursday’s declines could very well be the start of the inevitable Nasdaq correction, but no one has any way of knowing that. So far, the move downward is rather hum-drum and immaterial,” he added.
Bahnsen, who oversees $2.5 billion, said that rather than buying the tech dip, investors should look elsewhere, including the financial and energy sectors. – Pippa Stevens
Beyond Meat – Shares of the alternative meat company jumped after Baird initiated coverage on the stock with an outperform rating. “We are constructive on BYND’s growth prospects given the company’s rapidly growing brand equity and large addressable market,” the firm said. Baird’s $160 target is about 20% above where shares currently trade.
Zoom Video — The videoconference stock slid as work from home names were hit hard during Thursday’s tech sell-off. The fall also came after Pfizer’s CEO said the company could learn the early results of the phase three trial for its Covid-19 vaccine candidate in October. DocuSign also struggled.
Novavax — The biotech stock rose after data published in the New England Journal of Medicine showed positive results for the company’s Covid-19 vaccine candidate. The data was from a phase one study.
Read more movers here. — Jesse Pound
Markets at midday: Big Tech drives massive sell-off
The major averages were sharply lower in midday amid a rare sell-off in big tech stocks. The Dow dropped more than 700 points, or 2.5%. The S&P 500 slid 3.3% and the Nasdaq plunged 4.7%. Shares of Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft — the group that has lifted the market to record levels following the coronavirus sell-off — were all down at least 4.5%. —Fred Imbert
Be thankful for Apple’s stock split in the Dow’s plunge
Apple’s 4-for-1 stock split couldn’t have come at a better time before Thursday’s plunge in the Dow Jones Industrial Average. Apple shares were losing about 5% or nearly $6.50 to around $124 each around midday. The Apple stock split, which took effect Monday, cut the tech giant’s influence in the Dow. So Thursday’s $6.50 per share decline accounts for about 41 points in the Dow’s nearly 600 point decline. Using simple math, had a decline of this magnitude in Apple happened before Monday, a pre-split loss of almost 5% would have been a four-times higher price move and would have been around an over 200 point drag on the Dow. — Matthew Belvedere
Wall Street’s ‘fear gauge’ hits highest level since July
The Cboe Volatility Index (VIX) — widely considered to be Wall Street’s preferred “fear gauge” — traded above 30 for the first time since mid-July as traders loaded up on protection amid a sharp market sell-off. The VIX hit a high of 32.19 and remained above 29 heading into midday. —Fred Imbert
Tesla under pressure
Tesla shares slid more than 9% at their session low on Thursday, bringing the stock’s three-day loss to more than 18%. Shares rose to an all-time high on Tuesday, before ending the session lower after the company said it would raise up to $5 billion through a new stock offering. Losses accelerated on Wednesday when Baillie Gifford, Tesla’s largest outside shareholder, cut its position in the stock from 6.3% to less than 5% based on portfolio restrictions.
For the year Tesla shares are still up nearly 400%. – Pippa Stevens
Adam Crisafulli, founder of Vital Knowledge, on Thursday’s big sell-off:
“Someone hit the ‘sell tech, buy dreck’ button and this is creating a bid beneath beleaguered groups (travel/leisure, office REITs, non-essential retail, energy, regional banks, etc.) while IT gets pummeled,” he said in a note. “For tech specifically, the stocks are seeing large percent declines, but this comes after a MASSIVE recent rally. Tech has been untethered from fundamentals for a while and momentum can work in both directions.” — Yun Li
Big losses in technology shares sent the broader market tumbling from its record high on Thursday. The Dow dropped more than 500 points, weighed down by a 5% decline in Apple, which is on track for the biggest one-day loss since March. The S&P 500 fell 2.5%, while the tech-heavy Nasdaq traded 4% lower. — Yun Li
Tech stocks falling amid bubble fears
Tech stocks were pummeled on Thursday morning as the Nasdaq Composite dropped more than 3%. Some of the biggest tech stocks were performing even worse, with Amazon and Microsoft losing about 4% and Apple falling more than 5%. Zoom Video and Tesla suffered even larger blows, shedding 10.2% and 7.8%, respectively. The S&P 500 tech sector was on pace for its worst day since June 11.
The sell-off follows Wall Street commentary on Thursday morning that worried about a potential bubble in tech stocks, though many analysts stressed that this was not a replay of 1999-2000. — Jesse Pound
Pfizer CEO says vaccine trial results could come in October
Pfizer CEO CEO Albert Bourla said Thursday that the company could have the late stage trial results from its coronavirus vaccine candidate as early as October. The company has already enrolled about 23,000 participants in the trial, with a goal of at least 30,000, Bourla said during a Q&A with the International Federation of Pharmaceutical Manufacturers & Associations.
“We expect by the end of October, we should have enough … to say whether the product works or not,” he said.
The pharmaceutical company would then need to apply for emergency use authorization from the Food and Drug Administration or wait for a more extensive review. Shares of Pfizer rose about 0.2% on Thursday morning. — Jesse Pound, Berkeley Lovelace Jr.
Reopening stocks outperform as airlines and cruises jump
A strong rally among reopening stocks gave the broader market some support on Thursday as investors rotated into names sensitive to economic recovery and out of high-flying tech shares. American Airlines and United both jumped about 5%, while Delta climbed 3.5%. Carnival and Norwegian Cruise Line surged 11% each, and Royal Caribbean rose nearly 8%. Hotel stocks were also on the rise with Hilton, Marriott and MGM Resorts climbing 2% each.— Yun Li
Here are Thursday’s biggest analyst calls of the day: JPMorgan, Beyond Meat, FedEx & more
- Berenberg upgraded FedEx to buy from hold and downgraded UPS to sell from hold.
- Morgan Stanley upgraded Eli Lilly to overweight from equal weight.
- Baird initiated Beyond Meat as outperform.
- Deutsche Bank upgraded JPMorgan and Bank of America to buy from hold.
Pro Subscribers can read more here. – Michael Bloom
Apple falls 2%, down for a second day
Shares of Apple dipped more than 2% in morning trading on Thursday, falling for a second day. The tech giant had a huge run-up following its announcement of a 4-for-1 stock split, which was intended to attract more interest from individual investors. The boost from the split, which went into effect on Monday, seems to have started losing steam. Still, the stock is up more than 74% this year as one of the top performers. — Yun Li
Stocks open modestly lower as S&P 500 retreats from record high
Stocks fell on Thursday as some of markets’ recent enthusiasm cooled. The Dow shed 2 points for a loss of 0.002%, while the S&P 500 slid 0.45%. The tech-heavy Nasdaq Composite traded 1.35% lower. The S&P and Nasdaq rose to record highs during Wednesday’s session, while the Dow closed above 29,000 for the first time since February. – Pippa Stevens
Jobless claims data comes in better-than-expected
New filings for jobless claims came in at 881,000 for the prior week, the Labor Department said Thursday. Economists surveyed by Dow Jones expected the number to reach 950,000.
The number reflects both an improving labor market as well as a change in methodology from the Labor Department to address seasonal factors. Unique circumstances associated with the coronavirus likely caused jobless claims totals to be overstated during the pandemic.
While the number represented a drop from previous weeks, those totals were not revised, making comparisons difficult. However, the department did note that claims for the week ended Aug. 29 did represent a decline from the previous week’s 1.011 million. Continuing claims fell sharply, dropping by 1.24 million to 13.254 million. The insured unemployment rate, a basic calculation of those getting benefits against the total labor force, fell by 0.8 percentage points to 9.1%. – Jeff Cox
Increasing options activity a potential warning sign for stocks
Analysts are warning that increasing options activity in names such as Walmart and major tech stock could be a warning signal about the stock market. The S&P 500 closed at an all-time high on Wednesday and is up about 60% since hitting a low on March 23. Since hitting that low, Big Tech names such as Apple and Netflix have led the way higher. Recently, however, these names have seen higher-than-normal activity in the options market, which is making the overall stock market feel like it’s reaching a top, according to one expert.
CNBC Pro users can read more here. —Fred Imbert, Patti Domm
Biden leads, but gap is narrowing
Democratic nominee Joe Biden is ahead of President Donald Trump in most general election polls, but the gap is narrowing slightly in the wake of the parties’ national conventions.
Here’s where the polling averages stand as of Wednesday:
- FiveThirtyEight’s polling tracker has Biden ahead of Trump by 7.5 percentage points. Biden led Trump by more than 9 points in the tracker on the eve of the RNC kickoff on Aug. 24.
- RealClearPolitics’ polling average gives Biden the same 7.5-point advantage over Trump, 49.7%-42.2%. That gap has shrunk from the more than 10-point lead Biden held over the president in late June.
Read more here. — Kevin Breuninger
Facebook says it won’t allow new political ads in the week before election
Facebook announced that it would not allow new political ads to run in the week before the presidential election on Nov. 3, part of a new set of policies aimed at countering misinformation around the election. CEO Mark Zuckerberg said on a post on the social media site that, “This election is not going to be business as usual. We all have a responsibility to protect our democracy.” Facebook has regularly been criticized as not being aggressive enough in limiting the spread of political misinformation. The company’s stock was down slightly in thin premarket trading on Thursday. — Jesse Pound