Dow Drops 700 Points Because Everyone Is Afraid of Something
3:15 p.m. It’s ugly out there.
The S&P 500 has dropped 2.5% to 2807.75, while the Dow Jones Industrial Average has fallen 622.13 points, or 2.3%, to 25,939.72. The Nasdaq Composite has tumbled 3% to 7503.17. Less than an hour before the closing bell, the Dow was down more than 600 points.
If you pay attention to the headlines, the weakness appears to be driven by the ratcheting up of tensions between the U.S. and China. But the major market indexes are tell a more complicated story. The S&P 500 Information Technology index has dropped 2.9%, making it the hardest hit sector in the benchmark, and continuing a recent trend.
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It isn’t just tech, though, as all the FAANGs got walloped despite being in three different sectors now. Apple (AAPL) has declined 2.2% to $$221.97, Facebook (FB) has fallen 1.7% to $155.15, Netflix (NFLX) has slumped 5.7% to $335.52, Amazon.com (AMZN) has dropped 3.9% to $1,797.00, and Alphabet (GOOGL) is off 2.4% at $1,117.21.
But even some sectors that could be benefiting are getting hit. The S&P 500 Industrials index has slumped 2.5%, implying that investors are concerned about growth. The S&P 500 Utilities index up 0.5%, is the only sector in positive territory, a sign that investors are just plain scared.
“The bottom line is that among the sector bifurcation, the Small Cap unwind, the surge in rates and the spiking U.S. Dollar (all of which we’ve touched on lately), there is plenty to push the “market” around,” writes Instinet’s Frank Cappelleri.
Let’s just call it a mess.
https://www.barrons.com/articles/dow-drops-275-points-because-everyone-is-afraid-of-something-1539182954?siteid=yhoof2&yptr=yahoo