Nasdaq sinks more than 2.5%, leads market lower
The Nasdaq Composite Index tumbled more than 2.5 percent Friday, as investors overlooked a solid US jobs report to sell off prominent names from across the tech sector.
New York: The Nasdaq Composite Index tumbled more than 2.5 percent Friday, as investors overlooked a solid US jobs report to sell off prominent names from across the tech sector.
The Nasdaq sank 110.01 points (2.60 percent) to 4,127.73.
The Dow Jones Industrial Average fell 159.84 (0.96 percent) to 16,412.71, while the broad-based S&P 500 slumped 23.68 (1.25 percent) to 1,865.09.
The Department of Labor reported the US economy added 192,000 jobs in March, essentially meeting expectations and suggesting a continuation of the trend of slow but steady improvement in the labor market.
But analysts said the sell-off was spurred not by the jobs report or other news, but by the same negative sentiment that has hit tech and biotech names intermittently over the last few weeks.
A recurring concern is that hot technology stocks like Facebook and Netflix are overvalued.
"It is not about economic news, or earnings, or geopolitics; this is a market event," said Alan Skrainka, chief investment officer of Cornerstone Wealth Management.
"This is the frothiest part of the market cracking in a big way. Small caps are overvalued and the hottest names in the Nasdaq are leading the way down."
The losses among tech companies were broad based and included giants like Apple (-1.3 percent), Microsoft (-2.8 percent) and Google (-4.7 percent).
Also declining significantly: Facebook (-4.6 percent), Tesla Motors (-5.9 percent), Netflix (-4.9 percent), LinkedIn (-6.3 percent). Biotech names took a hit, including Biogen (-4.4 percent), Celgene (-4.3 percent) and Gilead Sciences (-2.4 percent).
But the tech sector had one bright spot with Friday`s first day of trade for GrubHub. The online food ordering company quickly jumped 30.8 percent to $34 from its initial public offering price of $26 per share.
Used-car retailer CarMax fell 4.2 percent on earnings that missed expectations by a penny at 52 cents per share. Revenues also fell short of expectations, even though total units sold rose 12 percent.
A potential acquisition of Swedish pharmaceutical company Meda by US peer Mylan collapsed after Meda announced its board rejected the proposal and that all talks were terminated. Mylan rose 1.5 percent.
Bond prices jumped. The yield on the 10-year US Treasury fell to 2.73 percent from 2.79 percent Thursday, while the 30-year dropped to 3.59 percent from 3.63 percent. Bond prices and yields move inversely.