Wall Street turns red, again weighed down by tech giants

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Wall Street turns red, again weighed down by tech giants

(AFP) September 04, 2020

The New York Stock Exchange fell early Friday, still under the impact of its heavy fall the day before with the new plunge of the tech giants.

Around 3:05 p.m. GMT, its flagship index, the Dow Jones Industrial Average, fell 1.44% to 28,885.36 points after falling more than 2%.

The Nasdaq, with strong technological coloring, sagged more heavily, losing 3.82% to 11.020.34 points. He gave up 5% a few minutes earlier.

The extended S&P 500 index fell 2.19% to 3,379.35 points.

Wall Street sank Thursday at the close and had its worst session since June, marking a sudden stop after starting September on the hats of wheel: the Dow Jones had sunk 2.78% and the Nasdaq by 4.96%.

Already undermined by the collapse of the day before, the major technology stocks continued to decline, which weighed particularly on the Nasdaq: Apple lost 5.36%, Facebook 5.32%, Microsoft 4.41% and Alphabet ( the parent company of Google and YouTube) 4.48%.

These sharp declines follow an almost uninterrupted period of rise for tech since the start of the second quarter, which had allowed New York to reach or flirt with all-time highs.

“I must admit that I am surprised to see a drop of almost 10% in the space of two days” on the Nasdaq, confesses Peter Cardillo of Spartan Capital Securities.

According to the expert, this possibly indicates a market rotation, as evidenced by the general good health of banking stocks and other sectors.

The long weekend investors were preparing for, Monday being a public holiday in the United States due to Labor Day, was another potential factor in this further tumble, with market participants being encouraged to sell before a three-day hiatus.

– Lower unemployment rate –

Just after the stock market opened on Friday, the major indexes seemed to benefit from a strong monthly employment and unemployment report from the Department of Labor, but its effect quickly wore off.

The unemployment rate in the United States fell to 8.4% in August, falling below 10% for the first time since April and falling much more than expected from July.

Analysts were indeed expecting 9.8%. In July, unemployment was 10.2%.

In addition, the US economy created 1.4 million jobs in August, in line with expectations.

However, these figures remain far from the level before the pandemic, with the US economy employing 11.5 million fewer jobs in August than in February.

For JJ Kinahan, head of market strategy for TD Ameritrade, Thursday’s data initially appeared to “provide initial support for major indices.”

“It is possible that part of the heavy losses of yesterday reflected fears of bad figures”, continues the expert.

Among the values ​​of the day, Amazon was down 5.90%, following the same direction as the other pillars of tech. The e-commerce giant, which benefited from increased demand during the Covid-19 pandemic, however announced on Friday the creation of 10,000 additional jobs in the United States.

The American parcel delivery specialist FedEx (-0.57%) will also considerably strengthen its workforce for the holiday season and announced Thursday adding 70,000 positions for year-end sales against 55,000 last year.

On the bond market, the 10-year rate on the US debt rose to 0.6755% against 0.6347% Thursday night.