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U.S. stock markets plummeted on the first trading day of the second quarter primarily due to a combination of uncertainty about a global trade war and major concerns about impending regulation on large-cap technology stocks. Monday’s broad-based market selloff was the worst start to April since the Great Depression of 1929.
The Dow Jones Industrial Average (DJI) closed at 23,644.19, dropping 1.9% or 458.92 points. The S&P 500 Index (INX) decreased 2.2% to close at 2,581.88. The Nasdaq Composite Index (IXIC) closed at 6,870.12, decreasing 2.7%. A total of 7.71 billion shares were traded on Monday, higher than the last 20-session average of 7.29 billion shares. Decliners outnumbered advancing issues on the NYSE by 4.17-to-1 ratio. On the Nasdaq, declining issues had an edge over advancers by 4.14-to-1 ratio. The Cboe Volatility Index (VIX) rose 18.28% and closed at 23.62, after hitting the day’s high of 25.72.
How Did the Benchmarks Perform?
The Dow lost 1.9% with only one of its 30 components closing in the green. All 30 components of the blue-chip index closed below their 50-day moving average. The major loser for the blue-chip index was Intel Corp. (INTC) which plunged 6.1% following a Bloomberg report that Apple Inc. (AAPL - Free Report) would use its own chips for Mac computers instead of Intel’s chips.
The S&P 500 decreased 2.2% with only 13 of the benchmark index’s 500 components closing in the black. Each of the 11 sectors of the S&P 500 declined, with 8 of them shedding more than 2%. Notable among these was the 2.8% decline in the Consumer Discretionary Select Sector SPDR (XLY) and the 2.4% decline in the Technology Select Sector SPDR. (XLK).
Additionally, for the first time since June 2016, the benchmark index closed below its 200-day moving average,. falling back into correction territory. The index’s major tech stocks which suffered losses include Intel, Amazon.com Inc. (AMZN - Free Report) and Advanced Micro Devices Inc. (AMD - Free Report) , which declined 6.1%, 5.2% and 5.2%, respectively.
The tech-laden Nasdaq Composite also lost 2.7% driven by a sharp decline in tech stocks. At present, the index is in negative territory for the year and on the verge of entering into correction territory. Beside Intel and Amazon, other major tech losers for the Nasdaq Composite were Tesla Inc. (TSLA - Free Report) , Netflix Inc. (NFLX - Free Report) , Nvidia Corp. (NVDA - Free Report) and Cisco Systems Inc. (CSCO - Free Report) , which lost 5.1%, 5.1%, 4.6% and 4.4%, respectively. Nvidia currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Trade War Fear Looms Large
Markets were gripped by fears of an ensuing trade war between the United States and China after President Donald Trump imposed tariffs of as much as $60 billion of Chinese imports. Consequently, China too announced plans for reciprocal tariffs on about 130 U.S. goods worth of $3 billion of imports from the United States.
Although $3 billion of exports is not very significant, investors are afraid that it could just be the beginning of a long and harmful trade war. Incidentally, total U.S. exports to China in 2016 stood at $115.6 billion.
Tech Stocks Continue to Bleed
Technology and Internet stocks continue to suffer led by President Trump’s renewed attack on Amazon. On Mar 31, he tweeted that the e-commerce giant has been using the U.S. Postal Service as a delivery boy, adding the service loses "billions of dollars" delivering packages for the e-commerce giant. T
Trump has already indicated that he wants to rein in Amazon by imposing Internet taxes. Meanwhile, the National Transportation Safety Board expressed displeasure with Tesla’s recent disclosure that revealed detailed information about a fatal California crash.
Economic Data
On Apr 2, the Institute for Supply Management (ISM) reported that its index of national factory activity decline to 59.3 in March from 60.8 in February. Notably, a reading above 50 indicates growth in manufacturing, which accounts for about 12% of the country’s GDP. Meanwhile, construction spending inched up 0.1% in February after remaining unchanged in January.
Constellation Brands Inc. (STZ - Free Report) delivered robust fourth-quarter fiscal 2018 results, wherein both the top and bottom line topped estimates and improved year over year. (Read More)
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Stock Market News For April 3, 2018
U.S. stock markets plummeted on the first trading day of the second quarter primarily due to a combination of uncertainty about a global trade war and major concerns about impending regulation on large-cap technology stocks. Monday’s broad-based market selloff was the worst start to April since the Great Depression of 1929.
The Dow Jones Industrial Average (DJI) closed at 23,644.19, dropping 1.9% or 458.92 points. The S&P 500 Index (INX) decreased 2.2% to close at 2,581.88. The Nasdaq Composite Index (IXIC) closed at 6,870.12, decreasing 2.7%. A total of 7.71 billion shares were traded on Monday, higher than the last 20-session average of 7.29 billion shares. Decliners outnumbered advancing issues on the NYSE by 4.17-to-1 ratio. On the Nasdaq, declining issues had an edge over advancers by 4.14-to-1 ratio. The Cboe Volatility Index (VIX) rose 18.28% and closed at 23.62, after hitting the day’s high of 25.72.
How Did the Benchmarks Perform?
The Dow lost 1.9% with only one of its 30 components closing in the green. All 30 components of the blue-chip index closed below their 50-day moving average. The major loser for the blue-chip index was Intel Corp. (INTC) which plunged 6.1% following a Bloomberg report that Apple Inc. (AAPL - Free Report) would use its own chips for Mac computers instead of Intel’s chips.
The S&P 500 decreased 2.2% with only 13 of the benchmark index’s 500 components closing in the black. Each of the 11 sectors of the S&P 500 declined, with 8 of them shedding more than 2%. Notable among these was the 2.8% decline in the Consumer Discretionary Select Sector SPDR (XLY) and the 2.4% decline in the Technology Select Sector SPDR. (XLK).
Additionally, for the first time since June 2016, the benchmark index closed below its 200-day moving average,. falling back into correction territory. The index’s major tech stocks which suffered losses include Intel, Amazon.com Inc. (AMZN - Free Report) and Advanced Micro Devices Inc. (AMD - Free Report) , which declined 6.1%, 5.2% and 5.2%, respectively.
The tech-laden Nasdaq Composite also lost 2.7% driven by a sharp decline in tech stocks. At present, the index is in negative territory for the year and on the verge of entering into correction territory. Beside Intel and Amazon, other major tech losers for the Nasdaq Composite were Tesla Inc. (TSLA - Free Report) , Netflix Inc. (NFLX - Free Report) , Nvidia Corp. (NVDA - Free Report) and Cisco Systems Inc. (CSCO - Free Report) , which lost 5.1%, 5.1%, 4.6% and 4.4%, respectively. Nvidia currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Trade War Fear Looms Large
Markets were gripped by fears of an ensuing trade war between the United States and China after President Donald Trump imposed tariffs of as much as $60 billion of Chinese imports. Consequently, China too announced plans for reciprocal tariffs on about 130 U.S. goods worth of $3 billion of imports from the United States.
Although $3 billion of exports is not very significant, investors are afraid that it could just be the beginning of a long and harmful trade war. Incidentally, total U.S. exports to China in 2016 stood at $115.6 billion.
Tech Stocks Continue to Bleed
Technology and Internet stocks continue to suffer led by President Trump’s renewed attack on Amazon. On Mar 31, he tweeted that the e-commerce giant has been using the U.S. Postal Service as a delivery boy, adding the service loses "billions of dollars" delivering packages for the e-commerce giant. T
Trump has already indicated that he wants to rein in Amazon by imposing Internet taxes. Meanwhile, the National Transportation Safety Board expressed displeasure with Tesla’s recent disclosure that revealed detailed information about a fatal California crash.
Economic Data
On Apr 2, the Institute for Supply Management (ISM) reported that its index of national factory activity decline to 59.3 in March from 60.8 in February. Notably, a reading above 50 indicates growth in manufacturing, which accounts for about 12% of the country’s GDP. Meanwhile, construction spending inched up 0.1% in February after remaining unchanged in January.
Stocks That Made Headlines
Constellation Brands Tops Q4 Earnings, Guides for FY19
Constellation Brands Inc. (STZ - Free Report) delivered robust fourth-quarter fiscal 2018 results, wherein both the top and bottom line topped estimates and improved year over year. (Read More)
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>