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Not so long ago, Amazon and Apple stock prices seemed to defy gravity and dragged the rest of the stock market with them. But what goes up also tends to go down, and the biggest tech companies collapsed today (10 October) as worried investors cashed their funds, projecting the technology sector on its worst day since 2011, according to the Wall Street Journal.
Technology stocks in the Standard & Poor's 500 Index fell 4.85% and dragged down the overall market. The Dow Jones Industrial Average fell by 831 points, which sounds scary, but since the Dow exceeded 26,000, it was only a 3% decline and the 80th drop in a day of its history, according to the Newspaper.
Although it is far too early to say that the US economy is heading towards a long-awaited recession, technology stocks were waiting for a correction after their gains this summer.
First, Apple, then Amazon, has reached $ 1 trillion in market capitalization over the last few months, fueled by robust profits and optimism about the buying power of consumers. But investors are beginning to doubt that equities will rise in perpetuity, as rising interest rates and nervousness over trade wars signal the time to move to more stable investments. Amazon dropped 6%, bringing its market capitalization to just $ 856 billion (it also reduced CEO Jeff Bezos' personal fortune by $ 9 billion, according to Bloomberg's calculations). Apple dropped 4.6%, leaving its market capitalization at 13 digits – barely. Twitter (-8.5%), Netflix (8.4%) and TripAdvisor (7.5%) were also among the biggest losers in technology.
A sale is also a buying opportunity, and it will not be a surprise if the market bounces tomorrow. But investors looking for reasons to bail out the nine-year bull market may not wait for a second warning.
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