Tech Sell-Off Leads To Significant Weakness On Wall Street

(RTTNews) - Following the mixed performance seen during Thursday's session, stocks showed a significant move to the downside during trading on Friday. The major averages all moved lower, with the tech-heavy Nasdaq showing a particularly steep drop.

The major averages ended the day off their worst levels of the session but still in negative territory. The Nasdaq plunged 398.69 points or 1.7 percent to 23,195.17 and the S&P 500 tumbled 73.59 points or 1.1 percent to 6,827.41.

For the week, the major averages turned in a mixed performance. While the Dow jumped by 1.1 percent, the S&P 500 slid by 0.6 percent and the Nasdaq dove by 1.6 percent.

The narrower Dow posted a more modest loss, falling 245.96 points or 0.5 percent to 48,458.05 after hitting a new record intraday high in early trading.

The weakness that emerged on Wall Street came amid a sell-off by tech stocks, as reflected by the slump by the Nasdaq.

Broadcom (AVGO) helped lead the tech sector lower, with the chipmaker plunging by more than 11 percent on the day.

The steep drop by Broadcom came even though the company reported better than expected fiscal fourth quarter results and providing upbeat guidance for the current quarter.

Tech stocks like Micron Technology (MU), Oracle (ORCL), Advance Micro Devices (AMD) and Nvidia (NVDA) also moved sharply lower, reflecting a continued rotation out of tech stocks.

Negative sentiment may also have been generated in reaction to comments by Chicago Federal Reserve President Austan Goolsbee explaining his decision to vote against cutting interest rates at last week's Fed meeting.

In a post on the Chicago Fed website, Goolsbee said he is uneasy about "too heavily front-loading rate cuts and just assuming that inflation will be transitory."

"While I voted to lower rates at the September and October meetings, I believe we should have waited to get more data, especially about inflation, before lowering rates further," Goolsbee said.

Sector News

Computer hardware stocks turned in some of the market's worst performances on the day, resulting in a 5.2percent nosedive by the NYSE Arca Computer Hardware Index.

Semiconductor and networking stocks also saw substantial weakness, contributing to the steep drop by the Nasdaq.

Outside the tech sector, oil service, brokerage and steel stocks also saw notable weakness, while some strength was visible among pharmaceutical stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1.4 percent, while Hong Kong's Hang Seng Index surged by 1.8 percent.

The major European markets also moved to the downside over the course of the session. While the French CAC 40 Index dipped by 0.2 percent, the German DAX Index and the U.K.'s FTSE 100 Index fell by 0.5 percent and 0.6 percent, respectively.

In the bond market, treasuries saw a notable pullback after moving higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.3 basis points to 4.194 percent.

Looking Ahead

Economic data may move back into the spotlight next week, with traders likely to keep a close eye on reports on employment, consumer price inflation and retail sales.