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Stock Market News For Nov 20, 2018

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Markets closed sharply lower on Monday as tech and Internet-related stocks took a hit. The huge selloff was led by FAANG stocks that dragged the broader market lower. Also, homebuilder confidence hit a two-year low in November, hurting markets further.

Also, investors continued to be cautious ahead of scheduled talks between the President Donald Trump and Chinese president Xi Jinping on the sidelines of the G-20 summit to be held in Buenos Aires later this month. This saw all three major indexes ending in negative territory.

The Dow Jones Industrial Average (DJI) slipped 1.6% to close at 25,017.44. The S&P 500 lost 1.7% to close at 2,690.73. The Nasdaq Composite Index closed at 7,028.48, losing 3%. A total of 7.7 billion shares were traded on Monday, lower than the last 20-session average of 8.7 billion shares. Decliners outnumbered advancers on the NYSE by a 2.72-to-1 ratio. On Nasdaq, a 2.94-to-1 ratio favored declining issues.

How did the Benchmark Perform?

The Dow shed 395.78 points, led by a decline in tech stocks. Also, conflicting signals over how upcoming talks between the United States and China on trade disputes will shape up made investors cautious. Shares of The Boeing Company (BA - Free Report) declined 4.5%.

The S&P 500 tumbled 45.5 points, as tech stocks weighed on the index. The Technology Select Sector SPDR (XLK) and the Communication Select Sector SPDR (XLC) were the biggest laggards declining 3.8% and 3%, respectively. The Consumer Discretionary Select Sector SPDR (XLY) lost 2.4%. Nine of the 11 major S&P 500 sectors finished the day in the red.

The tech-heavy Nasdaq gave up 219.4 points, led by huge selloff in tech stocks. Shares of Apple Inc. (AAPL - Free Report) declined 4%, while Facebook, Inc. and Amazon.com Inc. (AMZN - Free Report) tumbled 5.7% and 5.1%, respectively. Amazon has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Tech Selloff Rattles Markets

On Monday, tech stocks once again plummeted, dragging markets lower. FAANG stocks were at the helm of the carnage once again. Tech stocks have been responsible for the market’s long rally. However, the category has been on a rough ride this year. On Monday, shares of Apple took a hit following reports that the company had cut production orders in recent weeks for all its three iPhone models launched in September.

The iPhone maker flirted with a bear market throughout the day and is down 19.9% from its Oct 3 record closing high. Other FAANG stocks too felt the heat. Shares of Facebook, Amazon, Netflix Inc. (NFLX - Free Report) and Alphabet Inc. (GOOGL - Free Report) all declined. Shares of Netflix and Alphabet tumbled 5.5% and 3.8%, respectively. Tech stocks were the best performer in the S&P 500 in 2017. However, the tech sector is down more than 10% from its 52-week high attained earlier this year.

Weak Economic Data Dents Investor’ Confidence

On Monday, disappointing economic data once again weighed on markets. Reports showed that homebuilder confidence dropped 8 points in November to 60, hitting a two-year low. Rising mortgage rates and high prices of homes have been denting the confidence of homebuilders. 

The index stood at 69 last year in November and had hit a cyclical high of 74 last December. Buyer traffic declined 8 points to 45, while current sales conditions fell 7 points to 67.

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