Dow falls 150 points from record high, Nasdaq loses more than 1%
US stocks slid from record levels to start the week on Monday as weakness in the tech sector weighed on the broader market.
The Dow Jones Industrial Average fell from a record high of 150 points while the S&P 500 fell 0.6% after closing at a new high on Friday. The tech-heavy Nasdaq Composite lost 1.2%.
Bitcoin slammed on the weekend after an all-time high of $ 64,841 on Wednesday morning, according to Coin Metrics. At one point it was 19% lower than that record over the weekend before it rebounded. The cryptocurrency was last at USD 56,450 on Monday.
Tesla, a Bitcoin owner, was down more than 4%. Coinbase, a cryptocurrency trading platform that made its public debut last week, fell more than 3%.
“When a headline-grabbing asset goes down sharply at a time when the broad market is at expensive levels, it usually has a negative impact on the stock market, even if it is short-lived,” said Matt Maley, Chief Market Strategist at Miller Tabak.
Many bank stocks were lower as investors continued to take profits after the group’s big gains last week. Goldman Sachs fell 1.3% while Wells Fargo fell 0.3%. JPMorgan was also in the red.
Coca-Cola stocks rose after the consumer giant reported better-than-expected earnings and sales. The company also said demand returned to pre-pandemic levels in March.
Stocks posted gains for a week as earnings beat estimates and strong economic data lifted key averages. The S&P and Dow gained 1.4% and 1.2% respectively for the fourth straight week, while the Nasdaq posted its third straight week.
The first quarter earnings season started robustly, led by strong results from banks. Financial results exceeded expectations by 38%, while others in the S&P 500 surprised upward by 12%, according to data from Credit Suisse.
“We remain bullish on the equity markets overall and see continued strength in cyclical sectors that will benefit from a broad economic recovery,” said James Ragan, director of wealth management research at DA Davidson. “We expect very strong corporate results for Q1 2021 and Q2 2021 and believe earnings estimates could be revised slightly higher.”
UBS revoked its S&P 500 forecast for the year on Friday as recent data signaled a strong economic recovery. The company now envisions the S&P 500 ending at 4,400 by 2021, roughly 5% above where the benchmark index closed on Friday.
Regarding the coronavirus, White House chief medical officer Dr. Anthony Fauci, he expects the US to resume administration of the Johnson & Johnson vaccine. The Food and Drug Administration last week urged states to temporarily discontinue use of the single-dose vaccine “out of caution” after six women developed a rare bleeding disorder.
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