Dow closes more than 500 points lower as tech pressure mounts, Apple slides 4%
Stocks fell sharply on Wednesday, adding to September's struggles, as tech shares took another leg lower and investors fretted over uncertainty around the coronavirus pandemic and further stimulus.
The Dow Jones Industrial Average closed 525.05 points lower, or 1.9%, at 26,763.13. Earlier in the session, the Dow was up 176 points. The S&P 500 slid 2.4% to 3,236.92 and the Nasdaq Composite pulled back by 3% to close at 10,632.99.
"Investors are being whipsawed by conflicting COVID headlines and the growth vs. cyclical debate," said Adam Crisafulli of Vital Knowledge in a note. "The result is sentiment souring on both growth and cyclical for the moment (which obviously means stocks are for sale broadly)."
Shares of Amazon and Netflix dropped 4.1% and 4.2%, respectively, to lead Big Tech lower. Facebook slid 2.3%. Alphabet closed 3.5% lower. Apple ended the day down 4.2% and Microsoft dipped 3.3%.
Shares of Tesla fell 10.3% after Elon Musk offered new delivery predictions for 2020 and detailed a new battery design that he claims will make Tesla's cars cheaper to produce. The stock was also under pressure after Tesla sued the U.S. government to overturn tariffs on China.
The S&P 500 and Dow are down 7.5% and 5.9%, respectively, for the month. The Nasdaq has dropped 9.7% over that time period. Shares of Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft are all down at least 11% in September.
"This rotation out of tech and into cyclical stocks has picked up legs in September," said Art Hogan, chief market strategist at National Securities. He added that "September is a historically tough month and this one has been a quagmire of headwinds. Today is reflective of that."
Investors have faced a slew of headwinds this month, including a rising number of global coronavirus cases and uncertainty around new U.S. fiscal stimulus.
Earlier this week, the U.K. said it would impose stricter measures to curb the coronavirus outbreak. To be sure, President Donald Trump said the U.S. would not be implementing a second round of lockdowns. "The U.K. just shut down again. They just announced that they're going to do a shutdown, and we're not going to be doing that," Trump said.
On the stimulus front, lawmakers are still struggling to move forward with a new package. Federal Reserve Chairman Jerome Powell said before Congress on Wednesday that further fiscal stimulus is still needed for the U.S. economic recovery to continue.
"We've come a long way pretty quickly, and that's great. But there's a long way to go. So I just would say we need to stay with it, all of us. The recovery will go faster if there's support coming both from Congress and from the Fed," Powell said
Nike shares jumped 8.8% after the company said digital sales surged more than 80% last quarter. Earnings and sales blew past analysts expectations last quarter and the company gave a forecast for growth in the new fiscal year.
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