On Monday, a swathe of Wall St. stock indices had rounded off the session sharply lower with Nasdaq tumbling over 2.0 per cent, as market participants appeared to have ditched out mega-cap tech conglomerates alongside growth stocks in exchange of value stocks and defensives such as cyclicals and healthcare, while a potential default in US Government by October 19, added to further concerns.
Nevertheless, an upbeat Government data showing that new orders for US-borne factory goods climbed by 1.2 per cent in August and July data was revised higher to 0.7 per cent, had kept a lid on the losses in trade-sensitive Dow Jones Industrial Average.
However, as a steep downswing in tech stocks had pulled the trigger in the day’s Wall Street, Apple, Microsoft, Alphabet and Microsoft, the four most valuable company in US capital market, shed over 2 per cent, while Facebook Inc., the fifth-most valuable, teetered more than 5.0 per cent following a six-hour long outage at its apps alongside Instagram, which happened to be the longest ever outage in Facebook Inc servers according to data from Downdetector.com.
Besides, a sharp uptick in US Treasury Yields with 10-year US Treasury bond notes last trading at 1.481 per cent, had dampened appetite for riskier assets such as growth stocks.
Wall Street totters as investors favour safe-haven Treasury bond notes
Citing statistics, in the day’s Wall St.
wind-down, trade-sensitive Dow dwindled 0.94 per cent to 34,002.92 and Wall Street bellwether S&P 500 dropped 1.30 per cent to 4,300.46, while tech-heavy Nasdaq dipped as much as 2.14 per cent to 14,255.49. Meanwhile, addressing to possibilities of further downward spirals in mega-cap tech stocks, a Chief Investment Officer at Cresset Wealth Advisor in Palm Beach, Florida said, “For Big Tech, this is a short- to medium-term thing, part of a correction process.
Rates were clearly too low, due in large part to central bank policies, and now as investors anticipate those policies getting clawed back, rates are moving closer to their real value”.