Apple loses $180 BILLION in value plunging 8%

Apple loses $180 BILLION in value plunging 8%

September 4, 2020

Apple drops $180 BILLION in value plunging 8% in the largest one day loss ever recorded by an American company and just days after being named the most valuable

  • Stocks suffered their biggest one-day pull-back since March Thursday 
  • Investors dumped shares in tech giants including Apple and Microsoft 
  • Wall Street’s unloading of technology shares on Thursday ended with Apple plunging 8%. Amazon lost 4.6% and Facebook gave back 3.8%
  • Even with Thursday’s losses, Apple is still up 64.7% for the year
  • Amazon is up 82.3%; Zoom’s gain for the year is still a whopping 460.4%
  • There seemed to be no explicit catalyst for the sell-off but the market felt due for a breather, analysts said

Apple lost just under $180 billion in market value Thursday, plunging eight per cent, the largest one day loss ever recorded by an American company.  

Stocks suffered their biggest one-day pull-back since March after investors dumped shares in tech giants including Apple and Facebook and data suggested a long and difficult road to economic recovery ahead. 

The three main indexes all slumped throughout the day. The Dow Jones Industrial Average fell 2.8%, to 28,292.73. A day earlier it crossed 29,000 for the first time since February. The S&P 500 index lost 125.78 points to close at 3,455.06. The technology-heavy Nasdaq dropped 598.34 points to 11,458.10.   

In August Apple became the first U.S. company to boast a market value of $2 trillion, just two years after it became the first to reach $1 trillion. 

But Wall Street’s unloading of technology shares on Thursday ended with Apple plunging 8 per cent. Amazon lost 4.6 per cent and Facebook gave back 3.8 per cent. 

Even with Thursday’s losses, Apple is still up 64.7 per cent for the year, and Amazon is up 82.3 per cent. Zoom’s gain for the year is still a whopping 460.4 per cent.  

There seemed to be no explicit catalyst for the sell-off, with economic data coming in roughly where the market had expected and no companies issuing foreboding warnings. But the market felt due for a breather, analysts said. 

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The S&P technology sector, up more than 30 percent on the year as the best-performing of the 11 major sectors, plunged 5.4 percent by the afternoon as investors looked for cheaper stocks outside the tech sector. 

Shares of Facebook, Apple, Amazon.com, Microsoft and Google parent company Alphabet all sank throughout the day.

This marked a massive turnaround for the five stocks, which at the end of August were responsible for buoying Wall Street even in the face of a glum jobs outlook.  

Investors have been betting on the tech giants riding out the economic crisis and their stocks have driven the market’s recovery from the pandemic lows hit in March.

Investors have been betting those companies will keep making huge profits as people spend even more time online with their devices during the pandemic. 

They’ve also assigned lofty market values to new-found darlings such as Zoom Video Communications as many Americans work remotely and students do online learning. 

Last month, Apple made history by becoming the first US stock to reach a market value of $2 trillion.

But this high came tumbling down Thursday as traders sold off stocks. 

Apple shares fell 10.08 points or 7.67 percent from its previous close to 121.32 as of 3:03 p.m. 

Microsoft lost 15.67 points or 6.77 percent to 215.95.  

‘The prevalent attitude in the market now is that this is a healthy correction,’ said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.

‘(Investors) are in love with tech stocks and it’s going to take more than this for them to fall out of love with them.’

The pullback in stocks comes a day after the S&P 500 and the Nasdaq closed at record levels and the Dow came within 1.5 percent of its February peak. 

Signs the US economy’s rebound from coronavirus-driven lockdowns could be stalling in the absence of another round of stimulus for cash-strapped Americans also weighed on the markets.    

Labor Department data released Thursday showed the number of Americans filing new claims for unemployment benefits fell more than expected last week – but remained extraordinarily high. 

New claims for state unemployment benefits totaled 881,000 for the week ending August 29 – down from the 1 million in the prior week, the Labor Department said on Thursday. 

Economists had been predicting about 950,000 applications in the latest week. 

While the number of claims dropped more than expected, the figure still dwarfs pre-COVID times and is evidence the economy is still struggling to sustain a recovery and rebuild a job market devastated by the pandemic. 

New claims for state unemployment benefits totaled 881,000 for the week ending August 29

In addition, the methodology used in the weekly report to address seasonal fluctuations has changed, which analysts said led to fewer claims than over the past two months.

Separately, a survey showed US services industry growth slowed in August, likely as the boost from the reopening of businesses and fiscal stimulus faded. 

Chicago Federal Reserve President Charles Evans said Thursday that Congress needs to deliver more fiscal aid and indicated US monetary policy would be eased further and interest rates kept at ultra-low levels for years to help the economy recover. 

The closely watched monthly payrolls report is also set for Friday which will no doubt impact Wall Street one way or another. 

Overseas, European markets also marked a dismal day as weakness in tech names spread.

Shares closed 1.4 percent lower after rising more than 1.2 percent, with the group falling 3.76 percent in its biggest one-day decline since April 21.

Wall Street recorded its biggest one-day decline in three months Thursday as tech stocks – which surged last week – took a tumble 

The pan-European STOXX 600 index lost 1.4 percent and MSCI’s gauge of stocks across the globe shed 2.47 percent. 

MSCI’s index was on pace for its biggest one-day percentage drop since June 11 after closing at a record high of 594.06 on Wednesday.

The dollar continued to bounce, but gave up some gains after the weekly claims data, while the euro continued its recent slide to dip as low as $1.1789 after climbing as high as $1.20 earlier in the week after the European Central bank expressed concerns about its rapid rise.

The dollar index rose 0.135 percent, with the euro down 0.1 percent to $1.1841.

Benchmark 10-year US Treasury notes last rose 9/32 in price to yield 0.6234 percent, from 0.651 percent late on Wednesday.

Oil prices weakened, with both Brent and WTI crude hitting one-month lows on worries about weaker U.S. gasoline demand and a slowdown in the economic recovery.

US crude recently fell 0.29 percent to $41.39 per barrel and Brent was at $44.11, down 0.72 percent on the day.

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