NEW YORK: The Nasdaq Composite Index tumbled more than
2.5 per cent on Friday, as investors overlooked a solid US jobs report
to sell off prominent names from across the tech sector.
The Nasdaq sank 110.01 points (2.60 per cent) to 4,127.73.
The Dow Jones Industrial Average fell 159.84 (0.96 per cent) to 16,412.71, while the broad-based S&P 500 slumped 23.68 (1.25 per cent) to 1,865.09.
The Department of Labor reported the US economy added 192,000 jobs in March, essentially meeting expectations and suggesting a continuation of the trend of slow but steady improvement in the labour market.
But analysts said the sell-off was spurred not by the jobs report or other news, but by the same negative sentiment that has hit tech and biotech names intermittently over the last few weeks.
A recurring concern is that hot technology stocks like Facebook and Netflix are overvalued.
"It is not about economic news, or earnings, or geopolitics; this is a market event," said Alan Skrainka, chief investment officer of Cornerstone Wealth Management.
"This is the frothiest part of the market cracking in a big way. Small caps are overvalued and the hottest names in the Nasdaq are leading the way down."
The losses among tech companies were broad based and included giants like Apple (-1.3 per cent), Microsoft (-2.8 per cent) and Google (-4.7 per cent).
Also declining significantly: Facebook (-4.6 per cent), Tesla Motors (-5.9 per cent), Netflix (-4.9 per cent), LinkedIn (-6.3 per cent). Biotech names took a hit, including Biogen (-4.4 per cent), Celgene (-4.3 per cent) and Gilead Sciences (-2.4 per cent).
But the tech sector had one bright spot with Friday's first day of trade for GrubHub. The online food ordering company quickly jumped 30.8 per cent to $34 from its initial public offering price of $26 per share.
Used-car retailer CarMax fell 4.2 per cent on earnings that missed expectations by a penny at 52 cents per share. Revenues also fell short of expectations, even though total units sold rose 12 per cent.
A potential acquisition of Swedish pharmaceutical company Meda by US peer Mylan collapsed after Meda announced its board rejected the proposal and that all talks were terminated. Mylan rose 1.5 per cent.
Bond prices jumped. The yield on the 10-year US Treasury fell to 2.73 per cent from 2.79 per cent Thursday, while the 30-year dropped to 3.59 per cent from 3.63 per cent. Bond prices and yields move inversely.
The Nasdaq sank 110.01 points (2.60 per cent) to 4,127.73.
The Dow Jones Industrial Average fell 159.84 (0.96 per cent) to 16,412.71, while the broad-based S&P 500 slumped 23.68 (1.25 per cent) to 1,865.09.
The Department of Labor reported the US economy added 192,000 jobs in March, essentially meeting expectations and suggesting a continuation of the trend of slow but steady improvement in the labour market.
But analysts said the sell-off was spurred not by the jobs report or other news, but by the same negative sentiment that has hit tech and biotech names intermittently over the last few weeks.
A recurring concern is that hot technology stocks like Facebook and Netflix are overvalued.
"It is not about economic news, or earnings, or geopolitics; this is a market event," said Alan Skrainka, chief investment officer of Cornerstone Wealth Management.
"This is the frothiest part of the market cracking in a big way. Small caps are overvalued and the hottest names in the Nasdaq are leading the way down."
The losses among tech companies were broad based and included giants like Apple (-1.3 per cent), Microsoft (-2.8 per cent) and Google (-4.7 per cent).
Also declining significantly: Facebook (-4.6 per cent), Tesla Motors (-5.9 per cent), Netflix (-4.9 per cent), LinkedIn (-6.3 per cent). Biotech names took a hit, including Biogen (-4.4 per cent), Celgene (-4.3 per cent) and Gilead Sciences (-2.4 per cent).
But the tech sector had one bright spot with Friday's first day of trade for GrubHub. The online food ordering company quickly jumped 30.8 per cent to $34 from its initial public offering price of $26 per share.
Used-car retailer CarMax fell 4.2 per cent on earnings that missed expectations by a penny at 52 cents per share. Revenues also fell short of expectations, even though total units sold rose 12 per cent.
A potential acquisition of Swedish pharmaceutical company Meda by US peer Mylan collapsed after Meda announced its board rejected the proposal and that all talks were terminated. Mylan rose 1.5 per cent.
Bond prices jumped. The yield on the 10-year US Treasury fell to 2.73 per cent from 2.79 per cent Thursday, while the 30-year dropped to 3.59 per cent from 3.63 per cent. Bond prices and yields move inversely.
- AFP/fl
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The Dow Jones Industrial Average dropped 159.84 points, or 0.96 percent, to close at 16,412.71, after hitting a fresh high near the open. Still, the index managed to squeeze out its first 3-week win streak since November.
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