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Nasdaq loses more than 100 points as investors dump tech stocks


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Investing.com - U.S. stocks pared gains to close mostly lower, as a slump in tech stocks weighed on overall performance, while a surprise result from yesterday's UK general election had a muted effect on sentiment.

Investors ditched tech stocks in the late afternoon U.S. session, as the Nasdaq fell more than 2%, after Goldman Sachs released a report warning investors about the lofty valuation and low volatility of the top-five tech leaders, known as the FAAMG - for Facebook, Amazon , Apple, Microsoft and Alphabet.

"This outperformance, driven by secular growth and the death of the reflation narrative, has created positioning extremes, factor crowding and difficult-to-decipher risk narratives (e.g. FAAMG's realized volatility is now below that of Staples and Utilities." Goldman Sachs said in a note to clients.

However, the slump in tech stocks was offset by a rise in financials, mostly banks, spurred by investor optimism that the sector would advance, after parts of the post-crisis Dodd-Frank financial regulations were tapered on Thursday.

The US House of Representatives on Thursday, passed legislation to roll back parts of the Obama-era, post-crisis Dodd-Frank financial regulations.

Meanwhile, a surprise result in the UK general election, which saw UK Prime Minister Theresa May's Conservative party fail to secure enough seats to form a majority in Parliament drew a muted reaction from U.S. equities.

The Dow Jones Industrial Average closed higher at 21,271.697. The S&P 500 lost 0.08% while the Nasdaq Composite closed at 6207.92, down 1.8%

The 'Bulls and Bears' on Wall Street

The top Dow gainers for the session: Pfizer Inc (NYSE:PFE) up 3.2%, JPMorgan Chase & Co (NYSE:JPM) up 2.4%, while Chevron Corporation (NYSE:CVX) rose 2.3%.

Apple Inc (NASDAQ:AAPL) down 3.9%, Microsoft Corporation (NASDAQ:MSFT) down 2.3% and Intel Corporation (NASDAQ:INTC) down 2.1%, were among the worst Dow performers of the session.

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