Techs tumble as investors weigh recent rally
A reporter points at ticker symbols for Apple Inc. and Netflix displayed on a screen at the Nasdaq Market site in New York September 2, 2015.
U.S. stocks opened lower, led by the Nasdaq Composite, which is seeing a drag from the likes of Netflix, as the company posted weaker-than-expected subscriber numbers late Monday.
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Other tech leaders, including Amazon and Facebook, are also falling in sympathy as investors assess these FAANG stocks, which have been hovering at all-time highs.
Elsewhere, the S&P 500 and the Dow Jones Industrial Average declined in early trading as investors digest results from Goldman Sachs and UnitedHealth, each of which exceeded analysts’ expectations on profit and revenue targets.
|I:DJI||DOW JONES AVERAGES||25033.24||-31.12||-0.12%|
|I:COMP||NASDAQ COMPOSITE INDEX||7795.7553||-9.96||-0.13%|
Goldman also announced David Solomon will become its new CEO, replacing Lloyd Blankfein who is retiring later this year.
|GS||GOLDMAN SACHS GROUP INC.||227.81||-3.63||-1.57%|
|UNH||UNITEDHEALTH GROUP INCORPORATED||249.16||-7.82||-3.04%|
Along with earnings, Federal Reserve Chairman Jerome Powell, appearing before the Senate Banking Committee, reiterated that the U.S. economy is in good shape. "Incoming data show that, alongside the strong job market, the U.S. economy has grown at a solid pace so far this year" he said in a statement while indicating that interest rates will continue to rise at a gradual pace. Powell will take Q&A from lawmkers throughout the morning. This is the first of the Fed’s two-day semiannual monetary policy report to Congress amidst growing concerns of the impact of tariffs on the economy.
“At Powell's testimony today, many will be watching to see what he says about the possibility of a trade war with China, which is weighing on many investors' minds and the Fed, too,” said Jonathan Hoenig, managing member at Capitalistpig.com. “That's one of the main arguments not to raise rates at present.”
In other economic news, U.S. home builders are feeling good. Builder confidence held steady in July at a reading of 68 as tracked by the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). “Consumer demand for single-family homes is holding strong this summer, buoyed by steady job growth, income gains and low unemployment in many parts of the country,” said NAHB Chairman Randy Noel in a statement. Additionally, Industrial production data for June rose 0.6% in-line with expectations and rebounding from a drop 0.5% in May.
In commodities, U.S. oil prices are taking a breather after falling more than 4% on Monday, currently sitting around the $67 per barrel level.
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