- The Dow Jones suffered a second straight loss on Friday.
- Tech stocks tumbled as another day passed without a congressional agreement on new stimulus.
- U.S. housing market data continues to represent a bright spot in the economy.
The Dow Jones tumbled for a second straight day as the massive sell-off in tech stocks continued unabated.
Less than an hour before the closing bell, the Dow had careened 174 points lower. The 0.65% pullback slammed the index down to 26,478.33.
The S&P 500 fell 0.71% to 3,213.04, and the Nasdaq plunged 0.94% to 10,362.91.
Dow Jones Falls as Sentiment Sours on Wall Street
Economic data is confirming what analysts feared would be the case if the U.S. failed to get the pandemic under control.
While European PMI releases all beat expectations this morning, U.S. data underperformed this week in virtually every area but the housing market.
A weaker U.S. dollar was the result, but even this failed to spur a rally among the multinational companies in the Dow 30.
The collapse in sentiment appears to stem from two essential fundamentals.
Tech Stocks Continue to Suffer
First, the extraordinary outperformance of mega-cap tech stocks has begun to reverse quite drastically.
Electric carmaker Tesla seems to be a bellwether for risk, given its incredible performance over the last few months. TSLA is plunging this week, and the rest of the Nasdaq is going with it.
While the Dow is not typically thought of as a tech-heavy benchmark, Apple and Microsoft collectively hold a nearly 15% weighting in the index.
Congress Drags Its Feet on Stimulus
A less technical reason for plunging sentiment is the anticipated expiration of the $600 weekly federal unemployment benefit.
This and other stimulus measures have helped keep lower-income households afloat – and in many cases, better off than before the pandemic.