Dow drops 100 points, Nasdaq falls more than 1% as tech slides

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Dow drops 100 points, Nasdaq falls more than 1% as tech slides

Value names outperforming as market leaders switch from CNBC.

Stocks fell as a steep decline in technology stocks that started last week carried through to Monday.

The tech-heavy Nasdaq Composite dropped 1.3 percent. Shares of Facebook, and Netflix dropped 3.6 percent and 5 percent, respectively. Amazon declined 1.6 percent while Google-parent Alphabet fell 1.5 percent.

The S&P 500 declined 0.5 percent as the tech sector dropped 1.9 percent. The Dow Jones Industrial Average fell 100 points as Microsoft dropped more than 2 percent.

Tech shares dove last week after Facebook dropped 19 percent Thursday on reporting weaker-than-expected revenue and lowering its revenue growth forecast. Facebook’s massive drop sent the tech sector down 1.15 percent last week.

“The guys at the top don’t stay there forever,” said Kim Forrest, senior equity analyst at Fort Pitt Capital. “I don’t see anyone displacing them right now, but they do have to make changes to their business models. For example, Facebook has to spend more money to make sure people aren’t abusing the platform. Investors like more money, not less.”

Spencer Platt | Getty Images Traders work on the floor of the New York Stock Exchange on July 12, 2018 in New York City.

Trade worries also rattled investors on Monday after Reuters reported that Canada, the European Union, Japan, Mexico and South Korea will meet next week to discuss a response to threats made by President Donald Trump about slapping tariffs on U.S. auto imports.

“I think the market is headed for jittery times,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “Those tariffs are showing up in earnings reports and eventually will hit the consumer. Once that happens, consumer sentiment will dampen.”

Tyson Foods lowered its fiscal-year earnings forecast, citing uncertainty around trade policies and tariffs. Shares of Tyson Foods dropped more than 7 percent.

Meanwhile, Caterpillar said in its second-quarter earnings report that recently imposed tariffs will shave off between $100 million and $200 million from its bottom line in the second half. The company also reported better-than-expected earnings and raised its full-year outlook, however.

Wall Street looked ahead to the Federal Reserve’s latest monetary policy meeting, which is scheduled to start Tuesday. Market expectations for a rate hike are just 3 percent, according to the CME Group’s FedWatch tool, but investors will look for clues on the central bank’s path toward normalizing policy.

Treasury yields rose ahead of the meeting on Monday, with the 10-year yield hitting 2.99 percent, its highest level since June 13.