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The New York stock market sank the biggest in three months. It fell dramatically, led by large information technology (IT) stocks that led the rally that began after the end of March.
◇ Nasdaq plummeted 5%: On day 3 (local time), the Dow index registered 2,8292.73, 807.77 points (2.78%) behind the battlefield. The daily decline is the largest since June 11.
The Standard & Poor’s (S&P) 500 Index fell 125.78 points (3.51%) to 3,455.06. The decline was the largest since early June.
The Nasdaq index plummeted 598.34 points (4.96%) and closed at 11,458.10.
The volatility index (VIX), which shows fear of Wall Street, soared 26.26% compared to the battlefield at 33.60. It broke the 200-day moving average and spiked to the 7-week high. ◇ Tech Rally ‘Sound tuning’: The sharp drop in the stock market on this day was led by big IT companies, which have risen a lot. Apple fell 8%, posting the biggest daily drop since March 16. Amazon and Netflix fell more than 4%, while Facebook fell 3.8%. Microsoft (MS) fell 6.2% and Alphabet fell 5.1%. Tesla fell 9%, dropping more than 18% in three business days.
On the other hand, stocks that fell due to concerns about the new coronavirus infection (Corona 19) recovered sharply. Carnival, a cruise ship operator, was up 5.2%, while Macy, a large department store, rebounded nearly 8%.
There were no big negatives in the stock market on this day, but it seems that profit-making sales have been poured into the relentless tech rally. CNBC said, “This technology-driven selloff is a solid correction,” and said, “It will trigger excessive speculation bubbles.”
Etti Dweke, head of global macro strategy at Nattisinvest, told Marketwatch: “In fact, the drop today is part of a ‘healthy respite’ as tech stocks and the broader stock market have not fallen much since June.” .
◇ No negotiation of additional support plans: In addition, the delay in negotiations on additional stimulus in parliament before Labor Day on the 7th of this month, when the summer break ends, also weighed on the stock market. House Democratic Speaker Nancy Fellow said she had a brief conference call with Treasury Secretary Stephen Manusin on the same day, but confirmed “severe differences of opinion” with the Republican Party.
Although it can’t be specified, the fact that Corona 19 will end one day may have triggered a profit-taking in tech stocks. The day before, the New York Stock Exchange had a higher value stock than Big TI, and expectations for an economic recovery were high.
However, just looking at the economic indicators released today suggests that the road to recovery is not easy. The number of applications for new unemployment benefits has decreased, but appears to be due to the change in the seasonal adjustment method. According to the US Department of Labor, the number of new unemployment benefits for a week through 29 of last month was 881,000, 130,000 less than the previous week, less than the estimated 940,000.
IHS Markit’s Purchasing Managers Index (PMI) increased from 54.8 in July to 55 in August. On the other hand, the Supply Management Association (ISM) services PMI fell from 58.1 to 56.9. In the second quarter, the productivity index (adjusted value) increased 10.1% and the trade deficit expanded to $ 63.6 billion.
(Seoul = News 1)
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