Once again the technology sector moved up, very modestly, in morning trading and then fell into the close. The Technology Select Sector SPDR Fund (XLK) saw its high for the dy around 11 a.m. New York time and then dropped into the close at $55.08, a loss of 1.64% for the day. The NASDAQ Composite Index followed much the same course and ended the day lower by 1.61%. The pattern is getting a little worrisome.
The same technology stocks that led the move lower yesterday were down today. But more so with bigger downside tumbles.
Amazon (AMZN) was down 1.73% at the close; Facebook (FB) was off 1.96%, and Apple (AAPL) fell 1.43%. Other big, big cap technology stocks fell hard too with Microsoft (MSFT) lower by 1.89%; Netflix (NFLX) dropped 4.11%; Tesla (TSLA) fell 3.97%; and Nvidia (NVDA) down 3.66%The biotech sector continued under pressure with the iShares NASDAQ Biotech ETF (IBB) lower by 2.76% at the close.
The damage today looked to be spreading to other technology stocks besides the big FANG names that had dominated the last stretch of the rally. For example, Qualcomm (QCOM) was lower by 2%; and Abode (ADBE) dropped 1.67%.
Unlike yesterday when the marketwise volatility didn’t move significantly higher with the fall in tech stocks, today the CBOE S&P 500 Volatility Index (VIX) climbed 11.72% to 11.06. Remember that the VIX measures demand for risk protection against a move in the Standard & Poor’s 500 and thus move upward in the VIX reflects an increase in nervousness in the market as a whole. That said the VIX is still near record lows and is a long way from the 20 level that I’d call average for this measure.