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Tuesday, January 25, 2022

Wall Street Falls After Major Tech Stocks Drop

Major Wall Street indices fell on Friday as shares in large technology-related companies plummeted on the Federal Reserve’s decision to quickly end stimulus measures during the pandemic.

The Fed’s announcement this week of three quarter percentage point rate hikes by the end of 2022 to combat soaring inflation put pressure on stocks in large tech companies.

Growth stocks including Apple Inc., Meta Platforms, Amazon.com Inc. and Microsoft Corp. fell 0.5-1.2 percent.

Nine of the 11 major industry indices in the S&P 500 fell early in the day, with tech stocks falling 0.9% most impacting the benchmark.

The value-oriented sectors, including finance and energy, which surged sharply after the Fed’s announcement, fell more than 2 percent each.

“It was clearly a (Fed) hawkish meeting on Wednesday, no two options,” said Thomas Hayes, managing member of Great Hill Capital LLC in New York.

“A lot of people holding high cash positions and / or hedging against technology, in case the Fed gets more aggressive than expected, breathed a sigh of relief in the short term or covered up their short positions.”

The Nasdaq should now end the week with a 3.6 percent decline, while the S&P 500 recorded a decline of nearly 2 percent.

However, in 2021, the shares of most of the big growth companies outperformed the market as a whole, with the Philadelphia SE Semiconductor Index up nearly 35 percent. The benchmark S&P 500 index rose 23 percent over the same period.

Read Also:  Facebook's profit jumped 17 percent.

Global stocks were also lower on Friday amid concerns over the rapidly spreading variant of the Omicron coronavirus, which has impacted global traders’ sentiment since late November.

At 9:58 am ET, the Dow Jones Industrial Average fell 508.31 points, or 1.42 percent, to 35,389.33, the S&P 500 fell 48.97 points, or 1.05 percent, to 4619.70 and the Nasdaq Composite fell 117.80 points, or 0.78 percent. , by 15,062.63.

The simultaneous expiration of stock options, stock index futures and index option contracts later in the day, known as the triple witch, is expected to cause volatility throughout the trading session.

Oracle fell 5.2 percent after a report said the enterprise software maker is in talks to buy electronic health records company Cerner in a deal that could be valued at $ 30 billion. Cerner shares were up 12.9 percent.

FedEx Corp. rose 7.3% after the supplier on Thursday revised its original forecast for fiscal 2022, despite persistent labor problems pushing down profit margins. Similar company United Parcel Service also rose 0.9 percent.

The number of falling issues exceeded the number of gains at a ratio of 3.62 to 1 on the NYSE and 2.71 to 1 on the Nasdaq. The S&P index recorded 16 new 52-week highs and five new lows, while the Nasdaq recorded five new highs and 266 new lows.

Authors: Shreyashi Sanyal and Bansari Mayur Kamdar

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World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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