Shares of technology stalwarts continued to decline, sending the broader markets down on Thursday. Decline in energy shares due to increase in U.S. crude production and low domestic gasoline demand also added pressure on markets. Meanwhile, investors also digested the news that Robert Mueller has been assigned the task of determining whether President Trump was guilty of obstructing justice.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) declined 0.1% to close at 21,359.9, recovering from a low of 21,261.87. The S&P 500 fell 0.2% to close at 2,432.46, recovering from a bottom of 2,418.53. The tech-laden Nasdaq Composite Index fell 0.5% to finish at 6,165.50, improving from an intraday low of 6,107.85. The fear-gauge CBOE Volatility Index (VIX) gained to trade near 11. Decliners outnumbered advancing stocks on the NYSE by a 1.83 to 1 ratio.
Technology Shares Continues to Decline
Technology dropped on Thursday, as investors continued to sell off technology shares. Drop in shares of large cap tech companies, including Facebook (FB - Free Report) , Amazon.com (AMZN - Free Report) , Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report) that have outperformed the broader market recently, led to the day’s losses. Shares of Apple and Alphabet declined 0.6% and 0.8% respectively. Additionally, shares of Facebook and Amazon experienced a decline of 0.3% and 1.3% respectively.
The tech sell-off was sparked off by release of a report from Goldman Sachs Group (GS - Free Report) that issued warnings on valuations of major tech stalwarts. According to the report, currently tech stocks are less volatile, warning investors that expectations for tech stocks to continue to rally for long run is not viable.
However, most the analysts believe that recent gains in technology sector have been deemed excessive, which is what is leading to a near term correction. The broader Technology Select Sector SPDR (XLK) dropped 0.5%.
Energy Shares Dip
Oil prices suffered yet another setback on Thursday on the back drop of increasing U.S. crude production and low domestic gasoline demand. On Wednesday, oil prices had dropped nearly 4% to their lowest level since November due to decline in crude stockpiles which was smaller than expected.
WTI crude prices declined by $0.27, or 0.6%, to $44.46 a barrel. The broader Energy Select Sector SPDR (XLE) fell 0.8%, emerging as one of the worst performing sector of S&P 500. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Latest Development on Trump’s conduct
As per The Washington Post and The Wall Street Journal, special counsel Robert Mueller has been assigned the task of probing whether President Trump was guilty of obstructing justice. Earlier, former FBI Director James Comey was dismissed by Trump from an investigation into ex-national security adviser Michael Flynn’s possible connection with Russian sources. Report now mention that Comey’s dismissal is currently a subject matter of Mueller’s investigation.
The seasonally adjusted initial claims for the week ending June 10 was recorded to be 237,000, a decline of 8,000 compared to the prior week's unrevised level of 245,000. The four week moving average was 243,000, a rise of 1,000 compared to the prior week's unrevised average of 242,000. The figure came below the consensus estimate of 242,000.
Stocks that made Headlines
Alaska Air Group Lifts CASM View on Deal with Pilots
Alaska Air Group (ALK - Free Report) , based in Seattle, WA, raised its forecast for a closely watched cost metric after pilots of Horizon Air, a subsidiary of Alaska Air Group, approved an amendment to the existing eight-year pay-related contract. (Read More)
BP, Reliance to Invest $6 Billion in Gas Blocks in India
BP plc (BP - Free Report) and Reliance Industries have planned an investment of $6 billion to augment India’s gas output from an east coast block, D6. (Read More)
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