On September 3, the three major U.S. stock indexes fell sharply from their all-time highs and suffered their biggest declines in months, as a broad pullback in technology stocks took hold. Among them, the Dow Jones Industrial Average closed down 810.87 points, or 2.79%, at 28289.63. The S&P and NASDAQ fell 3.52% and 4.96%, respectively.
Shares of tech giant Apple fell 7.93%, Amazon, Netflix and Facebook all fell more than 3.7%, and the S&P 500 technology sector fell more than 5%, its first daily limit in 11 trading days and its biggest one-day drop since March.
Wall Street analysts believe that despite the sharp drop in technology stocks during the day, there have been large rallies in stocks over the past few days. “Tech stocks have been out of touch with fundamentals for some time, so now it’s a pullback.”
At the same time, shares of companies benefiting from the economic restart bucked the trend, with cruise ship carnival up 6% and Macy’s up more than 7.9%.
Since late March, the S&P 500 is up more than 55 percent and the Nasdaq is up nearly 70 percent. The Dow Has risen more than 50% in that time. Some analysts believe the market needs to consolidate some of its recent sharp gains, and now is the right time.
“We don’t want another crash right now, but we don’t need new highs every day to sustain the uptrend. It’s been up for almost two weeks and it’s just had its biggest gain in two months and it’s going to take some time to digest.” But analysts also cautioned that it was uncertain whether the day’s drop would be enough to ease previous overbuying.
The same day, the Labor Department released a better-than-expected report on initial jobless claims of 881,000 for the week ended Aug. 29, but that didn’t stop stocks from falling. The U.S. economy added 1.321 million jobs in August, according to economists’ forecasts ahead of a jobs report on Thursday.
Wall Street analysts also believe that the current congressional debate on a new round of stimulus bill has been “protracted” but failed to pass, one of the main reasons is that the current PERFORMANCE of the US economy and the market is better than people’s expectations, thus reducing the pressure on the Congress to reach a stimulus package.
(Originally titled ‘The Dow Drops more than 800 Points’)