Tech Stocks Get Whacked

By Nicholas Jasinski |  Tuesday, April 26 Bloodbath. It was an ugly session on Wall Street. There was no last-hour rally to save the day like on Monday. And the latest batch of earnings reports after the bell today won't do much to boost optimism for tomorrow. Only 28 S&P 500 stocks finished in positive territory, as the index shed 2.8%. The Dow Jones Industrial Average lost 2.4%, as all 30 of its components fell. But losses were particularly sharp in the technology and growth-oriented parts of the market. The Nasdaq Composite tumbled almost 4% today, to close at its lowest level since December 2020. The index is down more than 20% year to date. The small-cap Russell 2000 index is also in dire straits. It lost 3.3% today, to extend its year-to-date loss to about 16%. It's also trading near 18-month lows. On the opposite end of the spectrum, the Big Tech stalwarts, whose stocks had been unstoppable for most of the past decade, have stumbled just as hard as the small caps have. Broadly defined, the group is generally said to include Apple, Alphabet, Microsoft, Amazon, Meta Platforms, Nvidia, and Netflix. Some like to throw in Tesla, as well. Consumer behavior change during the pandemic was a tailwind for most of their businesses, but the first-quarter results so far this earnings season haven't been so universally rosy. Netflix had a high-profile miss last week, which showed a stunning subscriber loss. Meta stock has halved since February. Tesla's solid first-quarter report has been overshadowed by CEO Elon Musk's Twitter saga. And tonight's results from Alphabet and Microsoft won't shift the narrative either (more on those below.) All of those Big Tech stocks are down double digits from their highs, with Netflix worth two thirds less than it was late last year. The tech weakness has been a big drag on the overall market. The impact on investor sentiment has probably been even greater. If the biggest, best-run, and most powerful businesses can't deliver on expectations in the current environment, how can smaller and less mature firms be expected to?

 

DJIA: -2.38% to 33,240.18 S&P 500: -2.81% to 4,175.20 Nasdaq: -3.95% to 12,490.74 The Hot Stock: Sherwin-Williams +9.4% The Biggest Loser: Tesla -12.2% Best Sector:  Energy +0.1% Worst Sector: Consumer Discretionary -5.1%