Nasdaq back in the red: tech losses again after sell-off week

A sobering week on the stock market is coming to an end – technology stocks are selling off on Wall Street and are weighing on the major indices, especially the Nasdaq. But there are also glimmers of hope.

Wall Street has stayed true to its weekly pattern. The week was characterized by high volatility – especially in the technology sector. This pattern was also evident during the meeting at the end of the week. In the end, the broad market held up significantly better than the technology sector, which was once again the outlier. Traders had already warned at lunchtime that there were hardly any arguments to buy and that prices could slide quickly again before the weekend. This was particularly true for technology stocks, whose volatility is currently even higher than that of the broader market.

"A long-term correction cannot be ruled out," warned chief market strategist Frederique Carrier of RBC Wealth Management with a view to the technology-heavy Nasdaq. It had slipped 10 percent since its most recent high in September and thus fell into correction mode. It had never happened so quickly before. Of the Dow Jones Index climbed 0.5 percent to 27,666 points, the S&P 500 rose by 0.1 percent. Of the Nasdaq Composite lost 0.6 percent after a trip into the plus. At Nyse there were 1,462 (Thursday: 1,014) course winners and 1,537 (2,005) losers. 75 (71) shares closed unchanged. The Nasdaq composite posted its strongest discount over the week since crashing in mid-March. Above all, the price losses at the technology heavyweights Apple, Facebook, Amazon, Microsoft and Alphabet, which lost up to 1.9 percent on a daily basis, weighed on sentiment. On a weekly basis, the titles lost 4.5 percent and more.

Volatility is likely to remain high

Traders anticipated continued high volatility against the background of tensions in the trade dispute between the US and China, the US election campaign and the ongoing struggle for a new stimulus package in the US. "Investors should be prepared for this," says investment strategist Altaf Kassam of State Street Global Advisors. However, the technology sector should continue to benefit from developments related to the coronavirus pandemic. "Fundamentally, the companies remain in a pole position," added portfolio manager Binay Chandgothia of Principal Global Investors.

Some support for the equity market came from increased US real income in August after falling in July. Given the importance of private consumption to GDP, that's good news, said a trader. In line with this, inflation based on consumer prices rose somewhat more sharply than forecast.

Oracle in the red despite good numbers

Among the individual values ​​it went for the shares of Oracle after better than expected quarterly figures down 0.6 percent, for which traders blamed the bad mood in the technology sector. Tesla gained 0.4 percent. The circular report that the electric car manufacturer wanted to sell its Model 3 vehicles produced in China in other Asian countries and Europe was supported.

The stock price of the supermarket operator Kroger decreased by 1.1 percent. The retail group did better than the market expected in the second period. However, the group reported increased wage costs and high costs for security measures for the workforce in Corona times.

Marriott International reported a slump in sales per available hotel room in August. The weak numbers were still an improvement on the lows of February and March. However, investors were not very convinced of the positive trend. The price fell 1.1 percent.

Euros under 1.19 dollars – oil 6 percent cheaper on a weekly basis

At the Currency market the dollar index stagnated. At $ 1.1840, the euro was slightly above the previous evening's level, but below the mark of $ 1.19which he briefly skipped the day before, according to statements by ECB President Christine Lagarde. If speculators who bet on a falling euro are pushed out of the market, the euro should move into the range 1.25 to 1.35 dollars, according to market expert Kit Juckes from Societe Generale. Juckes expects the growth gap between the Eurozone and the USA will be "significantly narrower" in the coming years and that will support the Euro.

The Oil prices recover from the daily lows in the course of the session – somewhat supported by a lower number of active oil production facilities in the USA. But traders spoke of impulse-free trading without a clear direction. The oil market will continue to be capped in the short term due to the surprising increase in weekly oil storage data in the USA the day before, it said. The price of a barrel of the US WTI variety rose 0.1 percent to $ 37.33, while Brent North Sea oil fell 0.6 percent to $ 39.83. On a weekly basis, oil was 6 percent cheaper.

For the Gold price it was down 0.7 percent to $ 1,942. On a weekly basis, however, against the background of the turbulence on the stock markets, there was a plus. "Gold still looks bullish, but it will struggle to break through the 2,000 mark again until the dollar continues its downtrend," said Oanda's market analyst Edward Moya.

There was little movement on US bond market. The yield on ten-year US Treasuries fell 0.8 basis points to 0.67 percent.