Was the overnight trading in ASX futures too optimistic – at the close of trading the SPI was only down 13 points, which is a small fall at the start of trading this morning?
But on Wall Street, the losses were far larger and local traders seem to have once again ignored the message from the crunching of the Nasdaq. But volumes were lower than normal for a Monday as investors holiday.
But what will have to watch during today is the reaction in Asian markets to news reports that Apple has cut its production orders for its most popular models of its iPhone. That news could see more weakness among tech giants in the region today.
It had its worst one day slide at 3% since late last month as the shares of tech major like Apple flirted with dips into bear territory and others, such as the all-conquering Amazon and Netflix slid deeper into the company of the bears.
The Nasdaq closed down 3.3% at 7,028—performing the worst among its benchmarks on the first day of a holiday-shortened week of three and a half sessions. The day’s loss was the worst for the Nasdaq since October 24.
The Dow ended down 395 points, or 1.56%, at 25,017 after being off 500 points during trading. The S&P 500 index slid 1.7% to end at 2,690.
Analysts said the slide came on low volumes thanks to the holiday week, so the underlying weakness might not have been as big as the size of the falls indicated, hence the more modest dip in the SPI.
Apple shares dropped 4% and narrowly avoided a close in bear-market territory, defined as a decline from a recent peak of at least 20%.
Shares of Google-parent Alphabet ended in a bear market for the first time since around 2011, highlighting a deterioration in the demand for Megatech stocks. Not helping were more downgrades from Apple supplier companies, while the Wall Street Journal reported that Apple had cut production orders for its three most popular iPhone models.
Netflix shares fell another 5.5% while Amazon shares were off more than 3% and are down 14% in the past month. Netflix shares are off nearly 19% in the same time.
