Nasdaq’s blues have returned, dragging down the US market for a third day in a week.
So much for the rebound on markets this week – gone in an hour or so of trading on Wall Street this morning as the Nasdaq fell out of bed as the sell off in tech stocks of all kinds reappeared after two days of solid gains.
But for some reason, those gains failed to convince and while the market was weak for most of the session, the selling accelerated as the day went on, intensifying in mid afternoon and taking the index down 3.2%.
It recovered briefly, but fell again just before the close at 6 am, our time, to be down 3.10% or 130 points.
That was the worst one day fall for the Nasdaq since November, 2011.
That dragged down other markets and the Dow fell heavily, down 1.6%, as did the S&P 500, which lost 2.09% of its value.
Our market is heading for a noisy and nasty start to trading with the ASX 200 tipped to plunge by around 50 points, according to the share price futures contract.
The fall erased the gains of Tuesday and Wednesday in the US.
Gold rose $US12 to $US1,318 an ounce but oil edged lower.
The losses among the big tech stocks of all kinds were notable.
Facebook shares fell 5.2%, Google’s Class A stock dropped 3.6% and the company’s Class stock was down 4.1%. Apple shares dipped 1.3%, Microsoft shares fell 2.7%, Blackberry was off 3% and Cisco was down 2%. eBay shares shed 3.2% as well.
US markets will be tested again tonight by not only the selling pressure on Nasdaq, but widely anticipated first quarter figures from big banks, JPMorgan Chase and Wells Fargo.
The swing in sentiment on Wall Street was dramatic – on Wednesday the S&P and the Nasdaq had climbed 1.1% and 1.7%, respectively, on confidence that the US Fed’ would not be lifting interest rates soon.
But no one advanced a coherent reason for why the selling wave erupted overnight. It just happened.
There was the mixed trade data from China, but the lowest jobs claim data for the US for nearly seven years was seen as a bull point for the economy and the market.
But as to why the fall emerged from nowhere – no one knows.
The Nasdaq biotech index plunged an even more dramatic 5.6%, as did the iShares Biotech ETF.
Regardless of the reason, it was enough to get the market pundits gloomily forecasting a correction – or even a bear market for a while (a correction is a fall of 10% from the previous peak and a bear market is a fall of 20% from the same peak).
