Wall Street’s main indices tumbled on Thursday and were on track for the deepest dives since June when investors dumped the high-flying technology sector, while concerns about a long and difficult recovery from the COVID-19-induced recession were highlighted by new economic data.
Sinéad Carew for Reuters:
The technology-centric Nasdaq led the declines when the heavy shares hit, including Facebook Inc, Apple Inc, Amazon.com Inc, Microsoft Inc and Google parent Alphabet Inc, all of which were down between 4% and 7%.
The five stocks, considered home winners during the coronavirus crisis, also account for about a quarter of the S&P 500’s market value and have driven the stock market’s narrow technology-driven recovery from the pandemic low in March.
“Think of the growing number of risks the market has taken in the last couple of months here,” said Emily Roland, co-chief investment strategist and John Hancock Investment Management. “We are 60 days away from the election. This can be an area where investors get a little scary. ”
She added: “Looking at the data today, the market has had the ability to drive higher and has not emphasized a macro environment that, yes, is improving, which is encouraging, but the economy is still fragile here.”
Earlier in the day, data showed that the number of Americans who submitted new claims for unemployment benefits fell more than expected last week, but remained extraordinarily high. The closely followed monthly salary report is set for Friday.
MacDailyNews Take: This too must pass. Expect a healthy degree of volatility in management until 3 November as the market hates uncertainty.