Wall Street ends lower as tech shares tumble amid selloff

A street sign is seen in front of the New York Stock Exchange on Wall Street in New York.
A street sign is seen in front of the New York Stock Exchange on Wall Street in New York.PHOTO: REUTERS

NEW YORK (AFP) - US stocks ended lower again on Friday (Sept 4), with tech shares tumbling in a continued selloff ahead of the holiday weekend, shrugging off data showing US unemployment falling more than expected in August.

At the closing bell, Dow Jones Industrial Average shed 0.6 per cent to finish the week at 28,133.31, while the broad-based S&P 500 dropped 0.8 per cent to 3,426.96, both recouping from the day's low point.

The tech-rich Nasdaq Composite Index fell 1.3 per cent to end at 11,313.13, adding to the losses from Thursday's 5 per cent rout. Markets are closed Monday for Labour Day.

After a strong summer that saw US indices enjoy their best August in decades, equities tumbled on Thursday with high-flying tech shares leading the market lower as investors cashed in on the big gains.

Amazon and Facebook were among the major losers in the session, dropping close to three percent, although Apple recovered enough to close flat.

Microsoft dropped 1.4 per cent even after news just before the close that the Pentagon confirmed a US$10 billion (S$13 billion) contract for the JEDI cloud computing program, despite a lawsuit from Amazon alleging bias given President Donald Trump's frequent attacks on the company and founder Jeff Bezos.

Shares got little help from the key US employment report which showed the jobless rate fell to 8.4 per cent, the first reading below 10 per cent since the coronavirus pandemic struck, but the economy added 1.4 million jobs last month indicating a continued but slowing recovery.

Some analysts have described the stock market as divorced from economic fundamentals, with unemployment still at historically high levels even with Friday's better-than-expected data.

"The market was very extended coming into this and it was overdue for a pullback. It's normal and healthy," Adam Sarhan of 50 Park Investments told AFP.

"We're going see some more pullbacks (and) a steeper pullback is warranted. Stocks got ahead of themselves."

The relatively better performance of financial shares Friday was evidence of a rotation in the market, Peter Cardillo of Spartan Capital Securities said.

"Today is the Friday before a long weekend," Cardillo said.

"People are selling and ignoring the macro news."