The Nasdaq Composite dropped more than 1 percent on Monday, marking the third straight time the Nasdaq took a tumble, with not so great forecasts about technology and internet companies chilled and worried investors about the future growth and sustainability of the technology sector that hadn’t shown any signs of slowing.
Not all was bad on Wall Street, at least for the energy companies, as oil prices rose, and bank stocks ahead of the Federal Reserve meeting helped the benchmark S&P 500 cut its losses, according to Reuters.
Companies like Netflix and Facebook didn’t give investors much confidence as they showed below average results, and Facebook just came off one of the worst days of trading ever. The technology index dropped 1.65 percent, falling more than 1.5 percent for a third day in a row.
Investors are worried about the FAANG group, which got off to a bad start this week as Facebook dropped 4.3 percent and Netflix dropped 4.6 percent. Even when Amazon and Google’s parent company, Alphabet, had good news for investors, the stocks still dropped. Apple fell as well, dropping less than a percentage point.
“Investors are still trying to digest results from FAANG stocks last week, and trying to figure out if it’s just another bump in the road or if something more meaningful is in play,” Cliff Hodge, director of investments for Cornerstone Wealth in Charlotte, N.C., said.
“People are worried these stocks won’t hold up or will not continue to grow. They are looking at the big picture and wondering if we’re getting later and later in the cycle and trying to decide if it’s time to be more defensive.”
Some good news is that six of 11 major S&P sectors finished higher on the day.
The Federal Reserve isn’t expected to change rates, even as the market was pricing in an anticipated hike in September as the economy continues chugging along.
The S&P index recorded 13 new 52-week highs and two new lows, while the Nasdaq recorded 22 new highs and 64 new lows, Reuters reports