S&P 500 Extends Decline on Weakness in Technology Stocks
By Gunjan Banerji and Caitlin Ostroff
Declines in shares of technology companies pushed the S&P
500 toward a third consecutive week of declines, capping another
tumultuous stretch for the stock market.
The S&P 500 slipped about 1.5%, with losses accelerating
midday. The tech-heavy Nasdaq Composite lost 1.8%. The Dow Jones
Industrial Average shed about 326 points, or 1.2%.
The S&P 500 and Nasdaq are on track for weekly declines,
while the Dow is headed for a slim gain.
Friday's moves continue a spell of volatility that has dominated
recently, mainly driven by the tech heavyweights that powered the
market higher this year. These companies continued to falter
Friday, dragging major indexes lower.
The big tech companies have outsize influence on the S&P 500
given their towering market valuations.
In one sign of the reversal at play in recent weeks, a version
of the S&P 500 that gives every company an equal weighting has
barely budged this month. Meanwhile, the standard index has slipped
Stocks have also swung this week as the Federal Reserve said the
U.S. economic outlook remains highly uncertain. Some investors were
disappointed that the central bank didn't offer more guidance
around additional stimulus measures or specifics about its
Speculation that the Fed would keep interest rates near zero for
some years, resulting in low bond yields, has been encouraging many
people to move funds into riskier assets like stocks.
The occurrence of so-called quadruple witching -- when both
futures and options linked to individual stocks and stock indexes
expire on the same day -- means investors are braced for another
choppy session Friday. A surge in options trading targeted at giant
technology stocks by both small and large investors has also been
magnifying the market's ups and downs in recent days.
"It is normally a day where you're glued to your screen and
you're watching for volatility," said Altaf Kassam, head of
investment strategy for State Street Global Advisors in Europe.
"We've had an abnormal amount of options on single stocks, so you
might see some movement in single stocks."
In corporate news, shares of Oracle lost 0.6% after the Trump
administration said it would block downloads of TikTok and the use
of Chinese messaging and payment app WeChat. Under the latest plan
for a majority U.S. ownership of Chinese-owned video-sharing app
TikTok, Oracle and Walmart could together own a significant
Shares of Nvidia lost 2.7%, while Amazon.com stock fell about
Investors are also watching for progress in Covid-19 vaccine
trials and monitoring economic data to assess how much stocks can
climb, following a rebound from March lows.
"If you think about it, we've had all the easy gains," said Mr.
Kassam. "It's going to get incrementally harder for us to keep
pushing up that hill."
Fresh data released Friday showed that consumer sentiment in the
U.S. increased more than expected in early September, though
confidence among Americans remained at depressed levels.
Also on Friday, lawmakers are aiming to unveil a bipartisan
spending bill averting a government shutdown next month. Democrats
and Republicans remain at an impasse over another round of
coronavirus relief despite President Trump's renewed interest in a
The breakdown in negotiations has disappointed some investors
who expected another relief package would lend more spending power
to Americans and boost economic recovery. Additional support could
bolster consumer spending, which powers two-thirds of the U.S.
Overseas, the pan-continental Stoxx Europe 600 fell 0.7%.
In Asia, China's Shanghai Composite Index led regional gains,
with a more than 2% rise by the close of trading, helped by rallies
in financial stocks. State-owned China Life Insurance and New China
Life Insurance both surged by 10%, the maximum daily gain allowed,
as did broker Zheshang Securities.
Foreign investors have added to their holdings of Chinese
stocks, helping bolster the yuan, which in recent days has hit its
strongest levels against the dollar since May 2019.
Elsewhere, major indexes in Hong Kong, Japan and South Korea
advanced less than 0.5%, while the Australian benchmark fell
--Joanne Chiu in Hong Kong contributed to this article.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com and Caitlin
Ostroff at email@example.com
(END) Dow Jones Newswires
September 18, 2020 14:34 ET (18:34 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.