The New York Stock Exchange ended sharply lower on Monday, weighed down by the tech sector, Facebook and inflation fears.
According to final results at the close, the Dow Jones index lost 0.94% to 34,002.92 points. The Nasdaq, with strong technological coloring, dropped 2.14% to 14,255.48 points. The S&P 500 fell 1.30% to 4,300.46 points.
Nasdaq heavyweight, Facebook plunged 4.89% to 326.23 dollars, cumulating the setbacks between the accusations of a whistleblower on the group’s policy and a mega-failure of several hours of its networks. Since its peaks in early September, the stock has lost 15%. Nine of the eleven sectors of the S&P finished in the red, weighed down by the communication (-2.11%) and information technology (-2.36%) sectors.
Facebook remained “in the center of attention as one of the most serious losers” of the session “following the interview of a whistleblower and internal problems at the company”, summarized the Schwab analysts. The social network is first the target of accusations from a whistleblower who will testify before Congress on Tuesday to say that Facebook chooses “profit rather than safety”. Internal research for the group has shown that its social network Instagram has negative effects on the morale of teenage girls. To this was added on Monday a mega-blackout affecting the access of the group’s four networks – Facebook, Instagram, Whatsapp and Messenger – to millions of users.
In one session, because of the fall in his shares, the wealthy co-founder of the group Mark Zuckerberg, 37, lost $ 7 billion in a few hours, says a Bloomberg count and 19 billion since mid-September. Facebook is one of the largest capitalizations on Wall Street, ranking generally behind Apple, Microsoft, Google (Alphabet) and Amazon.
Oil and inflation
But the sharp decline in the technology sector had already begun as soon as Wall Street opened, investors being worried about the inflation which is eroding the future cash flow of these groups and their ability to finance their growth and their share buybacks. On Friday, the Commerce Department published a very high inflation figure (4.3% over one year in August, according to the PCE index) and an acceleration over the month. Apple dropped 2.46% to $ 139.14, Amazon 2.85% to $ 3,189.78 and Alphabet 1.98% to $ 2,675.30. The title of the group of electronic payments Square fell 5.45% to 226.25 dollars.
Operators also reacted to the OPEC + meeting as oil prices, including the recent rise along with other energy prices, raise fears of persistent inflation. Member countries and their allies have chosen to renew their strategy of modestly increasing production for November, ignoring calls to open the floodgates further and pushing prices higher. Benchmark oil prices have soared, with the price of US WTI reaching its highest since 2014 and Brent since 2018. Suddenly, energy stocks were on the rise (+ 1.63%). Abroad, the troubles of the Chinese real estate group Evergrande, which suspended its listing on the Hong Kong Stock Exchange on Monday, did not help restore confidence.
In the United States at the weekend, investors are also watching the official labor market figures for September. After a disappointing August, analysts expect some 450,000 job creations in September with an unemployment rate down slightly to 5.1% instead of 5.2%. “Another reason for investors to remain wary,” said Peter Cardillo of Spartan Capital Securities. The analyst recalled “the dubious reputation” of October for stockholders. “A month when many events occurred in the past such as the crash of 1929 and that of 1987”.