Stocks drop as Nasdaq on pace for worst month since 2008

Stocks sank Friday as the market opened with a sell-off in technology stocks, capping a brutal month for Wall Street.

The tech-heavy Nasdaq composite and the S&P 500 index were both down roughly 1.6 percent Friday morning, while the Dow Jones Industrial Average opened the final trading day of April with a loss of 1 percent.

All three major indexes were on track to end April with steep losses, driven largely by threats from higher interest rates, energy prices and inflation.

The Nasdaq is on pace to close April down 13 percent from the start of the month — its worst monthly loss since October 2008 — and nearly 20 percent since the start of the year. The S&P is down roughly 9 percent since the start of the month, and the Dow is off 5 percent from its opening level in April.

“Fears of slowing growth, higher interest rates, uncertainty about supply chains and geopolitical events have weighed on the broader market, but tech has carried the brunt of the pain,” wrote Lindsey Bell, chief markets and money strategist at Ally, in a Friday research note.

A nosedive in technology stocks, which soared throughout most of the past two years, fueled much of the overall decline in the market. Amazon was down 12.1 percent Friday after reporting a $4 billion quarterly loss Thursday afternoon. Shares of Apple, Alphabet, Netflix and Microsoft were also down more than 2 percent each on the day.

“Tech was once the darling of the market. It was these stocks that led the market out of the pandemic fueled bear market, as they were viewed as defensive plays that would weather the economic slowdown better than other parts of the market,” Bell wrote.

“Now, with a growing belief that we are heading for a slowdown in growth, tech has been less resilient.”

All three major indexes grew by more than 10 percent each in 2021 as the U.S. economy soared from the depths of the coronavirus recession, gained a record 6.4 million jobs and grew 5.7 percent. But stocks have fallen steadily since the start of the year as the economic fallout of the war in Ukraine, global supply snarls and resilient consumer demand fueled the highest annual U.S. inflation in more than 40 years.

The Federal Reserve began raising interest rates in March to cool off the overheating economy, which often dents stock market performance. As borrowing costs rise, corporations often see smaller profit margins and become less willing to invest in expansion and production.


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