Sudden technology tumble continues as stocks fall further
NEW YORK (AP) - U.S. stock indexes are declining Monday as technology companies, which were near record highs last week, suffered a second day of sharp losses. Investors are selling some of the best-performing stocks of the year and buying companies that have struggled by comparison. General Electric is jumping after the conglomerate said CEO Jeffrey Immelt will step down.
KEEPING SCORE: The Standard & Poor's 500 index sagged 5 points, or 0.2 percent, to 2,426 as of 2:45 p.m. Eastern time. The Dow Jones industrial average, which closed at a record high Friday, lost 58 points, or 0.3 percent, to 21,213. The Nasdaq composite dropped 37 points, or 0.6 percent, to 6,170. The Russell 2000 index of small-company stocks slid 5 points, or 0.4 percent, to 1,416.
TECH SELL-OFF: Apple shed $4.74, or 3.2 percent, to $144.24 while Google parent Alphabet lost $12.69, or 1.3 percent, to $957.43. Facebook fell $1.75, or 1.2 percent, to $147.85 while Microsoft sank 53 cents to $69.79. Other 2017 top performers like Activision Blizzard, Netflix and Skyworks Solutions also tumbled.
Technology stocks have done far better than the rest of the market this year and were trading close to all-time highs before Friday's drop. The S&P 500 technology index shed 2.7 percent Friday, one of its worst drops of the year. That erased a month's worth of gains.
THE QUOTE: Julian Emanuel, an equity strategist for UBS, thinks technology stocks may fall a lot further and wind up 10 percent lower than they were last week. He said the technology companies should continue to do well, but the stocks have done so much better than the rest of the market in recent months that they are due for a downturn.
"Any time that you have that degree of extreme sector outperformance, two things happen: the overall market tends to get a bit more volatile, and the leading group tends to underperform the laggards," he said.
Technology companies have been trading at some of their highest prices ever before Friday's drop, with a huge portion of those gains going to Facebook, Apple, retailer Amazon, Microsoft and Alphabet, Google's parent company.
IMMELT DOWN: GE said Immelt would step down after 16 years running the company. John Flannery, the head of GE's health care division, will take over the post in August. Immelt will remain GE's chairman until the end of this year. In recent years GE has sold or split off numerous businesses, including its financial services division, and focused on new technologies as it returned to its roots as an industrial company.
GE stock gained $1.15, or 4.1 percent, to $29.09.
ENERGY: Benchmark U.S. crude added 25 cents to $46.08 a barrel in New York. Brent crude, used to price international oils, added 14 cents to $48.29 a barrel in London. Among energy companies, Exxon Mobil rose 86 cents, or 1 percent, to $82.99 and Chevron picked up 94 cents to $107.34.
IT'S GETTING BETTER: Investors took a new look at some groups of companies that haven't done that well in 2017. That included phone companies, as AT&T picked up 18 cents to $38.98 and Verizon gained 52 cents, or 1.1 percent, to $47.25. The S&P 500's telecom index is down about 9 percent this year and energy companies are down 12 percent. Real estate companies have lagged the market as well, and they, too, climbed on Monday.
Some of this year's best-performing stock groups traded lower. That included health care, consumer-focused companies and basic materials makers.
FED ON DECK: The Federal Reserve will meet Tuesday and Wednesday, and investors expect the central bank to raise interest rates for the third time since December.
Emanuel said that if the Fed takes an upbeat view of the economy, investors will likely continue selling technology stocks and put their money into consumer-focused companies, banks, and other industries that should benefit from continued growth. But if the Fed sounds more pessimistic, investors may look for yield and safer investments and buy bonds, gold and high-dividend stocks instead.
BONDS: Bond prices wobbled and turned lower. The yield on the 10-year Treasury note rose to 2.21 percent from 2.20 percent.
OTHER ENERGY TRADING: Wholesale gasoline dipped 1 cent to $1.49 a gallon. Heating oil lost less than 1 cent to $1.43 a gallon. Natural gas fell 2 cents to $3.02 per 1,000 cubic feet.
CURRENCIES: The dollar fell to 109.84 yen from 110.20 yen. The euro inched up to $1.1199 from $1.1195. The British pound continued to fall. It slid to $1.2648 from $1.12724 following the U.K.'s general election, which left the Conservative party with a weaker hold on the government that could affect the country's bargaining position in its exit talks with the European Union.
METALS: Gold slipped $2.50 to $1,268.90 an ounce. Silver sank 28 cents to $16.94 an ounce. Copper lost 3 cents to $2.62 a pound.
OVERSEAS: European stocks also stumbled. France's CAC 40 dropped 1.1 percent and the Germany DAX shed 1 percent. Britain's FTSE 100 lost 0.2 percent. The benchmark Nikkei 225 in Japan slipped 0.5 percent and South Korea's Kospi declined 1 percent. The Hang Seng of Hong Kong lost 1.3 percent.
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AP Markets Writer Marley Jay contributed to this story. He can be reached at http://twitter.com/MarleyJayAP
His work can be found at https://apnews.com/search/marley%20jay