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Saturday, April 17, 2021

Tech stocks fall again, hitting S&P 500 for second day in a row

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Investors were jittery again Monday, driving stocks to their second consecutive daily decline.

Major technology stocks — the so-called FAANG group, led by Facebook and Amazon — were the worst performers on the S&P 500, a day after hitting record highs. The technology sector is also the largest among the 10 industry groups in the S&P 500.

Financial stocks, including banks and insurers, were the strongest performers on the S&P 500. The KBW Nasdaq Bank Index rose 1.5 percent, led by moves in Morgan Stanley, which rose 2.5 percent.

Indexes had been higher all day, but they began to turn down in the final hour.

Among the things weighing on the market, investors continue to track Federal Reserve interest rate increases. The U.S. central bank announced Monday that it would raise short-term interest rates by another 25 basis points at its March meeting, with another two likely by the end of the year. Some investors believe the higher rate will allow the Fed to resume cutting its $4.5 trillion balance sheet while still keeping rates low.

The stock market has surged this year and it is the first back-to-back rise in stock prices since 2014. It is largely driven by excitement about strong corporate earnings growth, but traders are also optimistic that Congress will pass tax cuts by the end of the year. It could trigger another significant wave of buying.

Even with Monday’s sell-off, the S&P 500 is up 8.3 percent so far this year, the Dow Jones Industrial Average is up 8.3 percent and the Nasdaq Composite is up nearly 10 percent.

The Dow fell 0.6 percent to 23,547.12, and the S&P 500 fell 0.8 percent to 2,635.13. The Nasdaq Composite fell 1.3 percent to 6,769.16.

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