The markets closed in the red as the markets continued selling off, with the NASDAQ experiencing its third day of declines and the S&P 500 missing Tesla’s entry into the index. The latest will be discussed in the final round.
SEANA SMITH: Welcome back to “The Final Round” here on Yahoo Finance. I am Seana Smith. With only about 30 seconds left on the trading day, the stocks start the shortened trading week with another sell-off, with the Dow currently above 2%, just around its lows – slightly below the lows of the day off, over 600 points. S & P by almost 2.7%.
But the bulk of the sell-off – and we saw that last week – is being led by a lot of big tech names, with NASDAQ down just over 4% today.
And that for today’s trading day. Again, all three major averages fell sharply, with the Dow and S&P each closing above 2%. S&P only gained 2.8%, which is a decrease of nearly 3% for this important average. The Dow closed just under 630 points. That is a decrease of 2.2%.
NASDAQ – that’s where we’ve seen the strongest sales. That’s still like that. But the NASDAQ closed a little over 4% and fell below 11,000. It was only three trading sessions where we were over 12,000. Such significant declines for the NASDAQ in the past three days. And the Dow just under 27,500.
Obviously, if you look at some of the biggest underperformers in the market today, Apple is a notable loser as it closed just off its day lows, down 6 and 1/2%. Another big tech mean, Microsoft has lost around 5%.
And today, some of the momentum winners we talked about over the past few months continued to sell today. Zoom, for example, only closes by 5%. Docusign, Salesforce – those were the three stocks we focused on on Friday. All three names are closing by almost 5% today.
And then if you look at the industry action, you can really see the broad-based sales we are seeing today. It’s not just in tech, although that’s where we see most of the sales. However, some of these cyclical trades – such as financials, industrials and commodities – saw significant declines. We have industrial and material products with a discount of almost 1 and 1/2%. The banks are currently saving almost 2%.
I would like to include my co-host Myles Udland. We’re also joined by Rick Newman, Akiko Fujita, and Jared Blikre to break down today’s action for us for the next 60 minutes.
And Myles, the beginning of a new week. It’s a shortened trading week. But it looks similar to Thursday and Friday.
MYLES UDLAND: Yes, I mean that – in no way did this feel like the start of a new week, but rather like the continuation of what we saw on Thursday and Friday. And I just want to draw your attention to a couple of areas, one that Jared just reported for us, namely that during today’s trading session, Tesla posted its worst one-day drop ever, down 21%.
Now some news, obviously. GM and Nikola’s story is not positive for Tesla. But that really was the figurehead of this market rally – whether they are Robinhood traders, whether there are strange things going on in the options market, whether they are shorts being pushed out of their positions. Tesla stock history has really had it all in the past year. And now that the stock is very fast – 30% off record high – I think I am sure that I got a lot of attention.
I remember not long ago – I think it was just before the pandemic – Tom Lee had this theory that people were buying Tesla because they were hunting for performance, their Russell 1000 growth index benchmark. I mean sure it is possible.
Tesla shares then doubled from that price, which seemed great. I think they nearly tripled from the price at which this theory was scrapped. So the stock really has drawn on a possible theory. And here we are again with a new breed of superlative, you know, we could call it when we talk about Tesla stocks.
And then exactly what happened to the banks today because we saw the banks – as our last guest, John Davi of Astoria Advisors, he outlines classic pro-cyclical trading in the early cycle. Well the banks – the KBW bank index is down 3 and 1/2% today.
That thesis was certainly challenged on a day when we were supposed to see the technology selling out in favor of some of the reopening stores, so to speak. But with the renewed decline in the 10-year period from around 4 basis points below 70 basis points, we see the banks under pressure.
And again, in the last three sessions, we’re seeing all sorts of ideas about where the market is headed. The only thing we know for sure is that we definitely saw the S&P declined 6% and 1/2%, and the NASDAQ was down nearly 10%.