Markets wrap: Tech rout sends stocks to worst week since March
U.S. stocks dropped, capping their biggest weekly rout since March, after earnings from the largest tech companies disappointed investors concerned that a slowing economy will damp profit.
The Nasdaq 100 declined about 2.6% after Apple Inc.'s iPhone sales and Twitter Inc.'s user growth both missed estimates, though Google parent Alphabet Inc. jumped after reporting a rebound in advertising. The S&P 500 Index dropped 5.6% over the past five days, the worst-ever loss in the week leading to a presidential election. Ten-year Treasury yields jumped to the highest since June.
The tech slump, coming after an unprecedented run higher this year, is adding to volatility that's likely to remain elevated heading into next week's U.S. election. Global equities posted the worst weekly decline since March as lockdown measures in some countries and the lack of an agreement on U.S. stimulus dented sentiment. New U.S. coronavirus cases topped 89,000, setting a daily record.
"Today's action is a reminder of just how fickle markets can be," said Yousef Abbasi, global market strategist at StoneX. "The earnings themselves were not awful, but the market has priced tech to near perfection and thus one fly - maybe even a fruit fly - in the ointment could perpetuate a sell-off."
In Europe, equities edged higher. Tech stocks also faltered as did Danish drug giant Novo Nordisk A/S, whose earnings disappointed analysts. Banks rose after Spain's BBVA SA and the U.K.'s NatWest Group Plc reported improved pictures for soured loans.
Elsewhere, spot gold prices rose. Crude oil slumped in New York.
Here are the main market moves:
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- The S&P 500 Index decreased 1.2% as of 4 p.m. New York time.
- The Nasdaq 100 Index dropped 2.6%.
- The Stoxx Europe 600 Index rose 0.2%.
- The MSCI Asia Pacific Index sank 1.7%.
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- The Bloomberg Dollar Spot Index rose less than 0.1%.
- The British pound increased 0.2% to $1.2954.
- The Japanese yen fell 0.1% to 104.68 per dollar.
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- The yield on 10-year Treasuries rose four basis points to 0.87%.
- Germany's 10-year yield climbed one basis point to -0.63%.
- Britain's 10-year yield increased four basis points to 0.26%.
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- West Texas Intermediate crude fell 1.6% to $35.60 a barrel.
- Gold strengthened 0.6% to $1,878.61 an ounce.
