Apple drops sharply after another downgrade
U.S. stock-market indexes pulled back on Monday, driven by a second-straight session of hefty losses in technology shares.
The tech-heavy Nasdaq Composite index , which hit an all-time high only to close down 1.8% on Friday, extended its losses. On Monday, the index declined by 56 points, or 0.9%, to 6,150.
But losses in broader indexes were largely contained. The S&P 500 was off by 2 points, or 0.1%, to 2,430. The technology sector was leading its losses, down 1.3%, but most of other sectors fared better. Energy shares were up 1.2%, while financials, industrials and telecoms were up about 0.5%.
The Dow Jones Industrial Average was outperforming slightly, thanks to big gains in GE shares after its leadership shuffle. That left the blue-chip index little changed at 21,267.
Friday's tech selloff was not surprising given how sharply these shares rallied over the past 12 months, said Karyn Cavanaugh, senior market strategist at Voya Financial.
"It could be a little concerning, because just as the tech has been leading the market on the upside, they can lead the market down as well," Cavanuagh said. "However, tech earnings have been particularly strong and given improving fundamentals, any swoon should be a buying opportunity for investors," she added.
On Friday, the Nasdaq Composite lost 1.8%, with its sharp pullback (http://www.marketwatch.com/story/nasdaq-is-threatening-to-log-its-biggest-blown-lead-in-212-months-as-tech-unravels-2017-06-09) coming after big recent gains for heavyweight tech stocks. The selloff (http://www.marketwatch.com/story/us-stocks-tipped-for-more-gains-as-investors-weigh-up-uk-election-results-2017-06-09) also followed a warning from Goldman Sachs analysts that highfliers such as Facebook Inc.(FB) , Amazon.com Inc.(AMZN) , Apple Inc.(AAPL) , Microsoft Corp.(MSFT) and Google parent Alphabet Inc.(GOOGL) (GOOGL) may be overextended.
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Economic news: May data on the U.S. federal budget is due at 2 p.m. Eastern Time.
As the week kicks off, investors are also focused on the Federal Reserve (http://www.marketwatch.com/story/all-eyes-on-tech-sector-ahead-of-expected-fed-interest-rate-hike-2017-06-10), which on Wednesday is widely anticipated to deliver an interest-rate hike.
Individual movers: Shares in Apple slumped 3.4% following a downgrade to neutral from buy by Mizuho Securities analysts (http://www.marketwatch.com/story/apple-downgraded-by-mizuho-the-second-ratings-cut-in-a-week-2017-06-12). Still, Apple shares are up 24.5% year to date, compared with 8.5% for the S&P 500.
It's the second time in a week that the gadgets giant has been downgraded, with the more bearish view once again stemming from concerns that optimism over the iPhone 8 has been baked into the stock.
Chip-gear maker Applied Materials Inc.(AMAT), streaming giant Netflix Inc.(NFLX) and chip maker Nvidia Corp.(NVDA) were also among the S&P 500's biggest early morning losers. They were trading lower by 1.7%, 1.5% and 1.2%, respectively.
On the upside, General Electric Co.'s shares (GE) rose 3.6% in premarket action following news that CEO Jeff Immelt is retiring (http://www.marketwatch.com/story/ges-jeff-immelt-to-step-down-as-ceo-and-chairman-2017-06-12-6914026) and will be replaced by John Flannery, currently president and CEO of GE Healthcare.
Other markets:European equities (http://www.marketwatch.com/story/european-stocks-pushed-down-by-tech-selloff-british-governments-woes-2017-06-12) pulled back, and Asian markets closed with losses (http://www.marketwatch.com/story/asian-markets-slip-as-tech-stock-selloff-spreads-2017-06-11), as the tech selloff spread to exchanges there. Oil futures traded higher, while gold futures and a key dollar index were a little lower. Treasury yields inched higher, with the 10-year yield up 2 basis points at 2.22%.
(END) Dow Jones Newswires
June 12, 2017 09:48 ET (13:48 GMT)