Stock markets widened their losses on Friday as technology stocks fell the day before, overshadowing generally positive news about job numbers in the US and Canada.
Tech-heavy Nasdaq fell four percent as major companies such as Apple Inc., Microsoft Inc., Amazon.com Inc., Tesla Inc. and Nvidia Inc. all fell.
After reaching a record level behind a narrow rally in historic stimulus and heavyweight technology stocks, the S&P 500 and The Nasdaq faced their worst day in almost three months Investors on Thursday withdrew money from a wide range of hot tech stocks.
The exact cause of the sale is hard to discern, but market observers say that after technology stocks performed well during the epidemic, people should expect a pullback as they cooperate at home using online services.
“Resistance is not clear after overly enthusiastic rallies in recent times, but the exact impetus and motivation of market movements remains an enigma,” said Ricky Ogawa of Mizuho Bank.
Technology, communication services and consumer preferences have fallen sharply in the major S&P sectors. But even after a sudden sell-off, technology shares are still well up from where they were a few months ago. Apple shares rose 65 percent and Amazon 82.3 percent for the year.
Share price for video conferencing app Zoom has grown 460 percent this year.
The darkness of technology has generally overshadowed the positive numbers about the employment picture Canada’s unemployment rate fell to 10.2 percent The U.S. rate fell to 8.4 percent.
Those new jobs are not enough to convince investors to buy stocks.
The Dow Jones Industrial Average and the S&P 500 fell two per cent in the afternoon, while technology-focused Nasdaq lost another four per cent after losing five per cent on Thursday.
The losses also extended to the Toronto Stock Exchange, where the benchmark S&P / TSX Composite Index fell 300 points, or nearly two percent.