At 1 p.m. New York time the Standard & Poor’s 500 was down 0.25%. At the close it was lower by 2.37%
The pick up in selling was led by big tech stocks. Amazon (AMZN), for example was down 1.57% at 1 p.m. and 2.32% at the close. Microsoft was down 1.22% but finished the day down 1.54%.
Technology stocks led early and late day selling. The NASDAQ 100 was down 0.39% at 1 p.m. and 3.16% at the close. The Technology Select Sector SPDR ETF (XLK)was down 0.75% and closed down 1.35%.
But the selling wasn’t limited to technology shares American Airlines (AAL) closed down 3.23% to finish the day below $12 at $11.93. Wells Fargo (WFC) closed off 3.47% to $22.80.
Gold, as has been the pattern on recent days of selling, fell too, despite its traditional roll as a safe haven in a down turn. The metal for December delivery dropped 2.14% on the Comex today, $40.80 an ounce, to $1866.80 an ounce. Gold mining stocks took punishment with Barrick Gold (GOLD) down 4.50% at the close. The VanEck Vectors Gold Miners ETF (GDX) dropped 5.97% too. The junior miners in the VanEck Vectors Union Gold Miners ETF (GDXJ) plunged 7.70%.
But the worst performance of the day was turned in by what I’d called the Tesla group. Tesla (TSLA) itself closed down 10.34% on a disappointing showing at the company’s Battery Day. The big announcements that the company made on new battery technology and falling battery costs elicited disappointment when the company indicated that they were three years away. Nonetheless Tesla’s talk of new batteries, new manufacturing techniques, and more intensive recycling of batter materials all added up in investors and traders’ minds today as less demand and hence lower prices for lithium, currently the key battery ingredient. Shares of Albemarle (ALB), the world’s lowest cost producer, fell 15.56%. SQM, the big, government controlled, Chilean producer dropped 11.82%. Some higher cost producers plunged even more. Lithium Americas (LAC), for example, closed down 21.57%.
Full disclosure: I own shares of Illumina, Barrick Gold, and Albemarle in my personal portfolios. I added shares of Illumina and Albemarle today. I also bought Call options on VanEck Gold Miners ETF (GDX) with a $40 strike and a December 18, 2020 expiration. The ETF closed at $37.63 today down from $40.02 at yesterday’s close.
