Dow Dives as Bulls Sink Amid Tech Wreck By

© Reuters.

By Yasin Ebrahim – The Dow fell sharply Friday, led by an Apple-fueled selloff in tech following quarterly earnings that failed to live up to expectations, while the ongoing rise in Covid-19 cases also soured investor sentiment.

The fell 1.42%, or 377 points. The was down 1.86%, while the slumped 2.77%.

Tech, which has been leading the broader market rebound since mid-March, is in the selling spotlight as investors mulled a string of quarterly results from FAANG stocks, excluding Netflix (NASDAQ:).

Apple (NASDAQ:) fell 6% after its weaker-than-expected iPhone sales overshadowed third-quarter results that beat on both the top and bottom lines. (NASDAQ:)’s third-quarter results also beat Wall Street estimates, but its underwhelming guidance sent its shares 5% lower.

Facebook (NASDAQ:) slumped more than 7% after a fall in user additions, but Wall Street continued to back the stock as the social media giant is expected to benefit from the ongoing “shift of ad spending to digital outlets,” Wedbush said in a note.

Google-parent Alphabet (NASDAQ:), however, sidestepped the selling, rising 4% as investors cheered signs of a rebound in ad-spending as the search engine giant reported third-quarter results that topped analysts’ estimates.

Twitter Inc (NYSE:) plunged 21% after bucking the trend of sharp user growth seen from other social platforms including Snapchat during the quarter, adding just 1 million users since the end of the second quarter.

Energy exacerbated the selling, falling more than 2%, paced by a decline in oil major Exxon Mobil (NYSE:) on disappointing quarterly results.

The sea of red on Wall Street comes as the sharp spread of the virus continues to raise fears that recent reopening measures could be rolled back, slowing the economic recovery.

“[I]t is very unlikely that the economy will so easily continue along on an uninterrupted positive trajectory, particularly if a resurgence of the virus undermines the progress made July to September,” Stifel Economics said in a note.

The likely resurgence of the virus in the winter could potentially lead to “further restrictions or regulations will only serve to complicate the outlook for the global recovery, domestic GDP, policy and, of course, next week’s election.”

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