Now that the whole market is falling, former favorites are taking the worst of the losses.
NEW YORK – More misery for technology stocks pulled major indexes lower on Wall Street Friday, worsening what turned into the worst month for the market in a decade.
Amazon, Facebook, Netflix and a handful of other huge technology companies, once the best-performing stocks on the market, are now leading the way lower. Their huge popularity during the recent boom years in the market made them even more vulnerable when investors’ mood turned sour, as it has this fall.
Big drops in those stocks as well as Apple and Alphabet, Google’s parent company, have contributed to what’s now a 20 percent drop in the Nasdaq from its peak in August. That index is heavily loaded with technology companies.
When the broader market was rising, those stocks rose even more. Now that the whole market is falling, these former favorites are now taking the worst of the losses.
“Technology was doing well on the way up because of momentum buying, and if you live by momentum, you die by momentum,” said Sam Stovall, chief investment strategist for CFRA.
Several big technology companies, notably Facebook and Twitter, have also suffered as a result of scandals over matters such as data privacy and election meddling, and traders worry that the companies will eventually face greater government regulation that could increase their costs and affect their profits.
Markets have suffered wide losses over the last week. The major U. S. indexes have fallen more than 11 percent in December, and without a substantial gain over the final days of trading, they are headed for their single worst month since October 2008, when the market was being battered by the global financial crisis.
Investors around the world have grown increasingly pessimistic about the global economy’s prospects over the next few years. It’s widely expected to slow down, but traders are concerned the cooling might be worse than they previously believed and that the U.
