So will the news post close that car maker, Tesla earned a profit and doubled sales in its 3rd quarter, and Microsoft did better, have any impact on investor sentiment after the worst day for seven years for US tech stocks on Wednesday?
The impact of the better than expected quarterly figures from Tesla and Microsoft, and Thursday night’s reports from Amazon, Alphabet (Google), Twitter, Intel, and Snap will be muted by what looks to be a massive change in investor sentiment towards tech shares, especially megatechs.
Wednesday’s sell-off saw the Dow down 606.11 points, or 2.4%, to 24,583.42; the S&P 500 slide 84.59 points, or 3.1%, to 2,656.10, it’s sixth straight losing session.
The Nasdaq slump 329.14 points, or 4.4%, to 7108.4, a performance that put the index more than 10% below its August 29 all-time high and therefore meeting the widely used definition of a market correction. The loss also marked the worst day for the Nasdaq since August 18, 2011.
October is shaping up to be a brutal month for shares with the S&P falling 8.9% month-to-date (but out of correction territory by the relative strength of Apple shares), the Dow down 7.1%, and the Nasdaq falling 11.7% since the start of the month.
Wednesday’s slump pushed the Dow into losing territory for the year, with the index down 0.6% so far in 2018. The S&P 500 also ended the trading day in the red, down 0.7% year-to-date.
The Australian market was certainly spooked with overnight futures trading signally a 90 plus plunge for the ASX 200 at the opening on Thursday, with similar falls tipped across Asia. The impact on the shaky Chinese markets will be watched closely because of the nervousness and the fact that big tech stocks are on the nose there as well.
The ASX 200 is already down more than 5% this month and nearly 3.9% year to date.
Wednesday saw Wall Street hit by a broad selloff that accelerated during the final hour of trading.
No single cause emerged as the trigger – it was more of the same – worries over rising interest rates, trade wars, and the overextended rally. The mailing of explosive devices (said to be pipe bombs) to CNN, the Clintons, George Soros, and Barack Obama also was mentioned as potentially unnerving investors.
AT&T reported on Wednesday (its still bedding down its Time Warner purchase) but the news on earnings and subscribers was not what the market had been seeking and the shares lost more than 8%. Streaming video giant, Netflix had another bad day and its shares fell 9%.
Shares in Comcast and Disney, shed 4% and 5%, respectively which won’t be encouraging as they look to swallow the parts of the Murdoch media empire at 21 st Century Fox for a combined $US105 billion.
Other major declines included Lionsgate at 9%, Viacom at 8.5%, Amazon at 6%, Discovery at 9% and CBS at 5%. The “best” tallies in the group included 21st Century Fox, which stepped back just 2%, and Google parent Alphabet, off less than 3%.
Apple shares fell 3.4% but rose slightly in late trading to be down just over 3% for the month so far – still better than many of its peers which are now suffering losses of 10% or more in the same time.
Berkshire Hathaway shares fell 2% on Wednesday to be down nearly 8% in the past month. But Warren Buffet’s company’s shares are still up 0.8% for the year so far, so it is still beating the S&P 500 – just. That is due to its big holding in Apple shares which despite its current slide, are still up 27% for the year to date.
Amazon shares fell 5.9% and are now down 17% in the last month, Facebook shares fell 5.4% and have lost 13% in the same time while Alphabet shares (Google) lost 4.8% and are down more than 12% in the last month.
