Tech Stocks Lead U.S. Markets Sharply Lower

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echnology stocks that have led the market in 2020 were taking a breather on Thursday, among the greatest losers. U.S. stocks opened mixed after government figures showed a decline in the number of people filing initial claims for unemployment benefits in the latest week. The selloff accelerated through the morning on Thursday. 

By late afternoon, the Dow Jones Industrial Average was down 877 points, or 3%, while the S&P 500 lost 3.9%. The tech-heavy Nasdaq Composite was off 5.3%.

The S&P 500 technology sector was down 6.1%. Apple (ticker: AAPL) stock lost 7.5%, Nvidia (NVDA) fell 9.5%, and Zoom Video Communications (ZM) dropped 10.5%. Some pullback for technology and tech-related stocks could simply be due after a vertiginous rally that only picked up steam in August.

The U.S. Labor Department reported on Thursday morning that 881,000 people filed initial claims for unemployment benefits in the week ended Aug. 29. Continuing claims dropped to 13.25 million from 14.49 million people. The report comes ahead of the Labor Department’s employment report for all of August on Friday. 

Reports of new talks over the stalled stimulus bill in Congress have fanned expectations of a deal in the U.S.

“It would appear that traders welcomed the talk between [House Speaker Nancy] Pelosi and Steven Mnuchin, U.S. Treasury Secretary, even though they didn’t amount to anything—a conversation is at least a step in the right direction,” said David Madden, market analyst at CMC Markets U.K. 

Shares overseas were higher Thursday following gains on Wall Street on Wednesday. In Asia, the Nikkei 225 rose 0.9% and the Kospi Composite rose 1.3%, while the Hang Seng slipped 0.4% and the Shanghai Composite lost 0.6%.

The Stoxx Europe 600 fell 0.6%. Germany’s DAX lost 0.5%, the U.K.’s FTSE 100 declined 0.6%, and the French CAC 40 ticked up 0.3%. France’s government on Thursday is releasing details of a €100 billion- ($118 billion) recovery plan.

Oil slid Thursday, with the price of West Texas Intermediate crude down 2% and Brent crude off by 2.2%.

Facebook (FB) shares fell 5.5% after the social media giant said Thursday that it plans to halt having new political ads on its platform in the week leading up to the U.S. election.

Campbell Soup (CPB) shares fell 7.7% even though the soup maker’s fiscal fourth-quarter results exceeded Wall Street forecasts for both revenue and earnings. 

CrowdStrike (CRWD) shares plunged 9.1% despite the cloud-based security software company’s fiscal second quarter results topping estimates.

Tesla (TSLA) shares were down 9.5% after news Wednesday that its largest outside shareholder, Baillie Gifford, cut its stake in the electric-car company, citing portfolio constraints due to the “substantial increase” in the company’s stock.

Kensington Capital Acquisition (KCAC), a special-purpose acquisition company, or SPAC, soared over 65% after announcing a deal to merge with QuantumScape, a maker of batteries for electric vehicles. The hot market for anything EV-related continues.

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