Wall Street ended mostly lower on Wednesday following a sharp decline in major technology stocks. The technology sector witnessed its worst single-day decline in more than a month after top executives of leading social media companies were asked to testify before U.S. lawmakers. Both S&P 500 and Nasdaq Composite closed in the red while the Dow managed to finish in the green.
The Dow Jones Industrial Average (DJI) closed at 25,974.99, gaining 0.1%. However, the S&P 500 Index (INX) was down 0.3% to close at 2,888.60. The Nasdaq Composite Index (IXIC) closed at 7,995.17, decreasing 1.2%. A total of 7.03 billion shares were traded on Wednesday, higher than the last 20-session average of 6.15 billion shares. Decliners outnumbered advancers on the NYSE by 1.30-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.63-to-1 ratio. The CBOE VIX increased 5.7% to close at 13.91.
How Did the Benchmarks Perform?
The Dow closed in the positive territory reversing its losing streak of three straight days. Notably, 19 components of the 30-stock blue-chip index closed in the green while 11 finished in the red.
The S&P 500 continued to suffer loses for the second straight day led by a decline of 1.3% in both Communication Services Select Sector SPDR (XLC) and Technology Select Sector SPDR (XLK) along with 1.1% decline in Consumer Discretionary Select Sector SPDR (XLY). However, 7 out of 11 sectors of the benchmark index closed in the green while four ended in the red.
The tech-heavy Nasdaq Composite also declined for the second-straight day and finished below its newly achieved 8,000 level led by stiff decline of the share prices of large-cap tech stocks.
Tech Sector Triggers Market Decline
On Sep 5, Sheryl Sandberg, the COO of Facebook Inc. FB and Jack Dorsey, CEO of Twitter Inc. TWTR testified before the U.S. Senate Intelligence Committee regarding foreign governments' use of social networks to spread misinformation and intervene in U.S. elections. However, neither Alphabet Inc. GOOGL CEO Larry Page nor its subsidiary Google's CEO Sundar Pichai appeared before Congress.
Social networking giants are increasingly removed pages which were found engaging in misinformation campaigns ahead of the U.S. midterm elections in November. Many of the suspicious accounts were from either Russia or Iran.
Notably, the Justice Department stated that it would meet with state attorneys general to discuss the issues related to inauthentic behavior or phishing schemes of social media platforms. This may result in tougher regulations for the technology sector.
Following the development, the share price of Facebook, Twitter and Alphabet were down 2.3%, 6.1% and 0.9%, respectively. Alphabet and Twitter carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
On Sep 5, the Commerce Department reported that the U.S. trade deficit surged 9.5% in July to $50.1 billion, its highest level in five months. The figure was also above the consensus estimate of $49.1 billion. The June trade deficit was however revised to $45.7 billion from the previously reported $46.3 billion. Notably, the 9.5% increase in trade deficit was the biggest monthly jump since 2015.
Stocks That Made Headline
Hawaiian Holdings Bearish on Q3 RASM, Revises 2018 View
Hawaiian Holdings, Inc.'s HA wholly owned subsidiary Hawaiian Airlines has issued an update on the third quarter of 2018 and the full year. ( Read More )
Halliburton's Shares Decline 6% on Drab Q3 Outlook
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The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hawaiian Holdings, Inc. (HA): Free Stock Analysis Report Facebook, Inc. (FB): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Twitter, Inc. (TWTR): Free Stock Analysis Report Halliburton Company (HAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research