Dow in Biggest Slump Since June as Tech Bulls Scatter on Volatility Spike
Investing.com
Published Sep 03, 2020 03:41PM ET
Updated Sep 03, 2020 04:06PM ET
By Yasin Ebrahim
Investing.com – The Dow closed sharply lower on Thursday as big tech stocks fell out of favor amid a jump in volatility and mixed economic data ahead of the key jobs report due Friday.
The Dow Jones Industrial Average fell 2.78%, or 808 points, the S&P 500 was down 3.46%, while the Nasdaq Composite slumped 4.96%.
A sea of red of washed over mega-cap tech stalwarts forcing traders to pull their bullish bets and reassess whether the recent run-up in the market was too much, too soon.
Apple (NASDAQ:AAPL) fell about 8% to lead the move lower in the Fab 5 stocks, with Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) ending the day deep in the red.
Sentiment on Google-parent Alphabet was further soured on reports that federal prosecutors could file an antitrust case against the tech giant as soon as this month.
A sharp rise in volatility also rattled investors, with the CBOE Volatility Index, the so-called fear index, surging 25% to a nearly two-month high.
Energy joined the selloff late as oil prices struggled amid ongoing concerns over the strength of crude demand.
Better-than-expected jobs data and softer services growth did little to improve sentiment on the economic recovery a day ahead of the release of August's nonfarm payrolls report.
The ISM non-manufacturing index slowed to a reading of 56.9 last month, from 58.1 in July, missing economists' forecasts for a reading of 57.
"The August ISM Non-Manufacturing report showed a modest decline to 56.9 from 58.1. Technically, this is the lowest level since the index began to improve coming out of the COVID-induced lockdowns in the Spring, but 56.9 is still a very strong outright reading," Jefferies (NYSE:JEF) said.
The U.S. Department of Labor reported Thursday that initial jobless claims fell to 881,000 in the week ended Aug. 28, beating forecasts of 950,000.
In other news, Help desk software provider Pagerduty (NYSE:PD) saw its narrower-than-expected quarterly loss overshadowed by softer full-year guidance, sending its shares down 26%.
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