U.S. Stocks Extending Pullback Amid Continued Tech Sector Weakness

(RTTNews) - Stocks have moved mostly lower during trading on Friday, extending the pullback seen in the previous session. The Nasdaq has shown a notable move to the downside, adding to the steep loss posted on Thursday.

Currently, the major averages are well off their lows of the session but still in negative territory. The Nasdaq is down 424.89 points or 1.6 percent at 25,457.06, the S&P 500 is down 66.98 points or 0.9 percent at 7,466.79 and the Dow is down 120.42 points or 0.2 percent at 52,432.55.

The continued weakness on Wall Street comes amid an extended sell-off by technology stocks, as reflected by the slump by the tech-heavy Nasdaq.

A steep drop by shares of Netflix (NFLX) is weighing on the tech sector, with the streaming giant plunging by 8.3 percent.

Netflix is under pressure after reporting second quarter results roughly in line with estimates but providing disappointing third quarter guidance.

Concerns about valuations are also contributing to the weakness among tech stocks ahead of earnings news from Alphabet (GOOGL), IBM Corp. (IBM), Tesla (TSLA) and Intel (INTC) next week.

"With sentiment brittle, investors are becoming increasingly wary of valuations in the AI and technology sector - most notably in the memory chip space where share prices have surged to unprecedented levels this year. AJ Bell investment director Russ Mould.

Semiconductor stocks have helped lead the tech sector lower on the day, with the Philadelphia Semiconductor Index tumbling by 2.9 percent to its lowest intraday level in nearly two months.

Outside of the tech sector, airline stocks are seeing considerable weakness amid a sharp increase by the price of crude oil, resulting in a 2.6 percent slump by the NYSE Arca Airline Index.

Brokerage stocks have also shown a significant move to the downside, while oil producer stocks are benefitting from the surge in crude oil prices.

U.S. crude oil futures have jumped back above $80 a barrel amid concerns about the escalating conflict in the Middle East.

Tehran launched strikes against several countries across the Gulf and wider region after the U.S. launched a wave of strikes against Iran for the sixth night in a row over control of the Strait of Hormuz.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index plummeted by 4 percent, while China's Shanghai Composite Index plunged by 3.1 percent.

Most European stocks have also moved to the downside on the day. The French CAC 40 Index is down by 0.7 percent and the German DAX Index is down by 0.6 percent, although the U.K.'s FTSE 100 Index is nearly unchanged.

In the bond market, treasuries are rebounding following the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.4 basis points at 4.525 percent.