Nasdaq posts biggest 3-day loss since March as tech slumps

By Fred Imbert, CNBC

Stocks fell Monday as a steep decline in technology shares that started last week continued.

The tech-heavy Nasdaq closed 1.4 percent lower, posting its biggest three-day drop since late March. Shares of Facebook,Netflix, Amazon and Alphabet all fell sharply.

The S&P 500 declined 0.6 percent as the tech sector dropped. The Dow lost 144 points as Visa and American Express lagged.

[post_ads]Tech shares dove last week after Facebook dropped 19 percent Thursday on reporting weaker-than-expected revenue and lowering its revenue growth forecast. Facebook's massive drop sent the tech sector down 1.15 percent last week.

"The guys at the top don't stay there forever," said Kim Forrest, senior equity analyst at Fort Pitt Capital. "I don't see anyone displacing them right now, but they do have to make changes to their business models. For example, Facebook has to spend more money to make sure people aren't abusing the platform. Investors like more money, not less."

Trade worries also rattled investors on Monday after Reuters reported that Canada, the European Union, Japan, Mexico and South Korea will meet next week to discuss a response to threats made by President Donald Trump about slapping tariffs on U.S. auto imports.

"I think the market is headed for jittery times," said Peter Cardillo, chief market economist at Spartan Capital Securities. "Those tariffs are showing up in earnings reports and eventually will hit the consumer. Once that happens, consumer sentiment will dampen."

Tyson Foods lowered its fiscal-year earnings forecast, citing uncertainty around trade policies and tariffs. Shares of Tyson Foods dropped more than 7 percent.

Meanwhile, Caterpillar said in its second-quarter earnings report that recently imposed tariffs will shave off between $100 million and $200 million from its bottom line in the second half. The company also reported better-than-expected earnings and raised its full-year outlook, however.

Wall Street looked ahead to the Federal Reserve's latest monetary policy meeting, which is scheduled to start Tuesday. Market expectations for a rate hike are just 3 percent, according to the CME Group's FedWatch tool, but investors will look for clues on the central bank's path toward normalizing policy.
"The Fed has said it expects to raise rates twice more this year," said Ed Keon, chief investment strategist at QMA. "If you look at the probability markets, most people in the market expect at least one more rate hike. It is the second one investors seem to be split on."

"Anything that provides some clarity on that would be helpful," Keon said.

Treasury yields rose ahead of the meeting on Monday, with the 10-year yield hitting 2.99 percent, its highest level since June 13.

American Express shares fell 2.8 percent after The Wall Street Journal that the company lured small business customers with low foreign exchange conversion rates only to raise rates later without notifying them.

Visa fell after Kroger said its California subsidiary will stop accepting Visa credit cards, citing high payment fees and rates.


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Business News: Nasdaq posts biggest 3-day loss since March as tech slumps
Nasdaq posts biggest 3-day loss since March as tech slumps
Business News
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