Markets

Nasdaq ends at lowest level since October 2014

Reuters | Updated on February 06, 2016 Published on February 06, 2016

nasdaq

The Nasdaq closed at its lowest since October 2014 on Friday, leading a sell-off on Wall Street following weak forecasts from technology companies, including LinkedIn.

LinkedIn dropped 43.6 per cent to $108.38, a day after the company's revenue forecast missed estimates.

Business analytics company Tableau Software lost half its market value and its shares hit an all-time low a day after it cut its full-year earnings forecast. Its shares ended down 49.4 per cent at $41.33.

Big tech names also sank, including Facebook, which dropped 5.8 per cent to $104.07. Alphabet fell 3.6 per cent to $703.76 and Amazon slid 6.4 per cent to $502.13. Netflix was down 7.7 per cent at $82.79.

Stocks like Amazon and Netflix, which both more than doubled in price last year, have been favourites with hedge funds. Friday's action may suggest some hedge funds may be taking a harder look at valuations.

"Tech has got a few shining examples of what happens if you disappoint," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "When that happens, that calls into question the valuations of all high-multiple stocks."

The Dow Jones industrial average closed down 211.75 points or 1.29 per cent to 16,204.83, the S&P 500 lost 35.43 points or 1.85 per cent to 1,880.02 and the Nasdaq Composite dropped 146.42 points or 3.25 per cent to 4,363.14.

Friday's January jobs report non-farm payrolls increased by 151,000 jobs, below the 190,000 expected by economists polled by Reuters as the boost to hiring from unseasonably mild weather faded. But strong wage growth and falling unemployment suggested a March interest rate increase could not be completely ruled out.

Declining issues outnumbered advancing ones on the NYSE by 2,330 to 720, for a 3.24-to-1 ratio on the downside; on the Nasdaq, 2,288 issues fell and 509 advanced for a 4.50-to-1 ratio favouring decliners.

The S&P 500 posted 7 new 52-week highs and 26 new lows; the Nasdaq recorded 3 new highs and 195 new lows.

Published on February 06, 2016
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