Tech slump sends stock market to its biggest loss since June | Business News

NEW YORK (AP) — Wall Street’s euphoria took a break Thursday, as steep losses in technology stocks dragged the rest of the market down with them.

The S&P 500 fell 3.5%, the biggest decline for stocks since early June, when investors were dealing with a surge of coronavirus infections in places like Florida, Texas and Arizona. There seemed to be no explicit catalyst for the sell-off, with economic data coming in roughly where the market had expected and no companies issuing foreboding warnings.

That said, the market felt due for a breather, investors said. Both the S&P 500 and Nasdaq hit record highs just the day before. Prior to Thursday, the S&P 500 had risen nine out of the previous 10 days.

Apple dropped 8%, Amazon lost 4.6% and Facebook gave back 3.8%. The Big Tech stocks have made massive gains this year. Investors have been betting those companies would continue posting huge profits as people spend even more time online with their devices. They’ve also assigned lofty market values to new-found darlings such as Zoom Video Communications as many Americans work remotely and students do online learning.

Market watchers have been questioning recently whether those gains were overdone. Apple is still up 64.7% for the year, and Amazon is up 82.3%. Zoom’s gain for the year is still a whopping 460.4%.

”There’s really very little to justify (these stocks’ upward move) other than euphoria,” said Mark Hackett, chief of investment research at Nationwide.

Hackett also noted the market has “embedded very optimistic assumptions” about the virus’s impact on the economy, as well as on prospects for Congress and the White House coming up with another economic relief package.

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