US stocks tumble in tech sell-off as Nasdaq loses 3.6%
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Traders work on the floor of the New York Stock Exchange, in New York City.
PHOTO: REUTERS
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NEW YORK - Wall Street stocks tumbled on July 24 following a bruising investor response to earnings from Tesla and Google parent Alphabet that added to worries about tech heavyweight equity valuations.
The tech-rich Nasdaq Composite Index finished down 3.6 per cent, or more than 650 points, at 17,342.41.
The Dow Jones Industrial Average fell 1.3 per cent to 39,853.87, while the broad-based S&P 500 dropped 2.3 per cent to 5,427.13.
The July 24 downcast reaction to results “feeds some angst about the mega cap stocks not being able to deliver stock performance,” said Briefing.com analyst Patrick O’Hare, adding that even strong results next week from Apple, Amazon and other tech giants may not be received well by Wall Street.
“It’s a general bid to reduce exposure predicated on the idea that these stocks have run up a long way in a short time,” Mr O’Hare said.
Tesla dropped 12.3 per cent after missing earnings estimates as chief executive officer Elon Musk touted progress on robotic and artificial intelligence technology. Analysts said the results added to worries about weakening profit margins amid ebbing demand for Tesla’s electric vehicles.
Meanwhile, Alphabet fell 5 per cent after topping analyst estimates in general but reporting disappointing figures for its YouTube business.
Among economic reports, the sales rate of new family homes in the United States dipped in June, missing analyst estimates amid still elevated interest rates.
Analysts expect that a reduction in the Federal Reserve’s benchmark lending rate later this year will help mortgage rates decline further, boosting home sales.
Besides corporate earnings, the calendar for July 25 includes the US government estimate for second-quarter growth. AFP
