Tech stock sell-off pulls down Nasdaq; Dow hits new high
Wall Street had an uneven finish Friday as investors unloaded their technology company shares in favor of energy and financial stocks.
The tech-heavy Nasdaq composite, which has outpaced gains by other U.S. stock indexes this year, fell the most. The Standard & Poor’s 500 index closed slightly lower.
Even with the sell-off in technology stocks, the Dow Jones industrial average and the Russell 2000 index of small-company stocks rose to new highs.
“We’re seeing investors rotate out of the international stocks and into the U.S. stocks in general,” said Sam Stovall, chief investment strategist at CFRA Equity Research. “And also a rotation out of technology and into energy, materials and financials.”
All told, the S&P 500 index fell 2.02 points, or 0.1%, to 2,431.77. The Dow rose 89.44 points, or 0.4%, to 21,271.97. The Nasdaq sank 113.85 points, or 1.8%, to 6,207.92. The Russell 2000 ticked up 6.09 points, or 0.4%, to 1,421.71. The indexes also closed out the week unevenly after several days of trading in a mostly narrow range.
More stocks rose than fell on the New York Stock Exchange.
U.S. stocks were coming off a two-day winning streak, which included a record high for the Nasdaq on Thursday. They were on track to extend those gains early Friday, each at one point trading above their most recent closing highs.
But then investors began to unload technology stocks. The sell-off centered on the biggest companies in the stock market: Apple, Microsoft, Alphabet and Facebook. But the biggest decliner was chip maker Nvidia, which sank 6.5% to $149.60.
Alphabet, Google’s parent company, fell 3.4% to $970.12. Apple slid 3.9% to $148.98.
The technology sector fell 2.7%. It remains up 18.5% for the year.
“It’s had a good run,” said Scott Wren, senior global equity strategist for Wells Fargo Investment Institute. “People are taking a little money off the table.”
Traders also bid up shares in energy companies as the price of crude oil rose.
Helmerich & Payne climbed 5.7% to $53.27. Rig operator Transocean advanced 4.6% to $8.81.
Benchmark U.S. crude rose 19 cents to $45.83 a barrel. Brent crude, used to price international oils, rose 29 cents to $48.15 a barrel.
Small-company stocks were among the big gainers, receiving a boost from a stronger dollar following the British general election. A stronger dollar tends to benefit small-cap stocks, because they tend to not have as much exposure to international markets as large-cap stocks.
The British pound fell more than 2 cents against the dollar after the Conservatives lost their majority in Parliament, which could send Britain’s negotiations to leave the European Union — due to start June 19 — into disarray. The pound weakened to $1.2724 from $1.2943. The dollar also rose to 110.20 yen from 109.94 yen. The euro fell to $1.1195 from $1.1222.
Corporate deal news led to some notable stock moves.
Pandora Media rose 1.2% to $8.52 on news that SiriusXM will invest $480 million in the online radio company. SiriusXM, which is buying preferred stock and taking a 19% stake in Pandora, will also select three people to be named to Pandora’s board. Pandora is breaking off a deal with investment firm KKR from last month. SiriusXM slid 3.7% to $5.20.
DuPont Fabros Technology jumped 9.8% to $60.80 after the data real estate investment trust and owner of wholesale data centers was acquired by another REIT, Digital Realty Trust. The deal is an all-stock transaction valued at about $7.6 billion. Digital Realty shares fell 2.9% to $113.32.
Some companies fell after issuing weak outlooks.
VeriFone Systems declined 3.5% to $17.68 after the maker of terminals for electronic payments cut its forecasts and said it will sell or restructure several businesses.
HNI slumped 12.6% to $39.27 after the maker of office furniture and fireplaces cut its forecasts because of slower sales and falling wholesale revenue.
Meanwhile, machine learning and analytics firm Cloudera dived 15.6% to $19.41 after its first earnings report as a publicly traded company.
Bond prices fell. The 10-year Treasury yield rose to 2.20% from 2.19%.
Wholesale gasoline rose 1 cent to $1.50 a gallon. Heating oil rose 1 cent to $1.43 a gallon. Natural gas rose 1 cent to $3.04 per 1,000 cubic feet.
Gold fell $8.10 to $1,271.40 an ounce. Silver fell 19 cents, or 1.1%, to $17.22 an ounce. Copper rose 4 cents, or 1.5%, to $2.65 a pound.
Germany’s DAX rose 0.8%, France’s CAC 40 gained 0.7%and Britain’s FTSE 100 climbed 1%. Japan’s Nikkei 225 added 0.5%. South Korea’s Kospi rose 0.8%. Hong Kong’s Hang Seng slipped 0.1%.
UPDATES:
2:35 p.m.: This article was updated with closing prices and context.
12:05 p.m.: This article was updated with later market prices, context and analyst comment.
This article was originally published at 7:05 a.m.
