Tumbling Tech Stocks Weigh on S&P 500 Futures

Wall Street finished mostly lower on Thursday, dragged down by sharp losses in technology stocks.

The S&P 500 Index declined 7.73 points, or 0.4%, to close at 2,191.08, its third drop in four sessions. Futures on the large-cap index were down 6.25 points by the end of New York trading after a mostly negative session.


Losses in technology stocks were the main catalysts behind Thursday’s drop. The S&P 500’s information technology index closed down 2.3%, with all eight sub-sectors finishing in negative territory.

Real estate stocks declined 1.7% as a sector, while utilities and consumer staples fell 0.9% and 0.7%, respectively. Healthcare, materials and consumer discretionary sectors also finished lower.

Financials were up 1.7%, extending their lead on the market since the November 8 presidential election. Industrials finished 0.8% higher.

The S&P 500’s energy index rose 0.3% in response to another large rally in crude oil. Brent futures prices spiked more than 4% to their highest level in over a year. The international benchmark has gained 15% since the Organization of the Petroleum Exporting Countries (OPEC) on Wednesday announced its first production cut since 2008.

Sliding tech shares sent the Nasdaq Composite Index to fresh two-week lows. The technology-driven average fell 72.57 points, or 1.4%, to 5,251.11.

The Dow Jones Industrial Average bucked the trend, rising 68.35 points, or 0.4%, to a new record high of 19,191.93.

A measure of implied volatility known as the CBOE VIX rose on Thursday to its highest level in two weeks. The so-called “fear index” climbed 5.6% to 14.07.

In economic data, US manufacturing in November expanded at the fastest pace in five months, offering further evidence of a rebounding factory sector. The Institute for Supply Management’s November purchasing managers’ index (PMI) rose to 53.2 from 51.9 in October.

A separate PMI gauge from IHS Markit said US manufacturing conditions reached a 20-month high in November.

The Labor Department also reported Thursday that initial jobless claims held below 300,000 for the 91st consecutive week, setting the stage for another robust nonfarm payrolls report on Friday. The official jobs report is expected to show the addition of 170,000 payrolls to the US economy in November, following an increase of 161,000 the month before.

Sam Bourgi is a financial market analyst for economiccalendar.com. He has more than six years of progressive experience in economic and financial analysis, research consulting and sectoral analysis. As a published author in government, peer-reviewed, online and industry sources, he has developed a fundamental approach to the financial markets with a broad focus on stock indices, commodities and the technology sector. He earned his Bachelor’s Degree from the University of Windsor and Master’s degree from McMaster University.