Thursday was ugly on Wall Street. But that doesn’t mean a full-fledged correction for the most popular stocks — or the broader market — is under way.
Big rallies often come to an ugly end — and that was certainly the case Thursday for tech stocks and other high-flying sectors that have benefited from momentum-driven waves of buying. But that doesn’t mean a full-fledged correction for the most popular stocks — or the broader market — is under way.
By the close, the Nasdaq was down 5%. The S&P 500 SPX, -3.51% fell 3.5% and the Dow Jones Industrial Average DJIA, -2.77% ended the day down more than 800 points, or 2.8%, after falling more than 1,000 points at its session low. The drop marked the biggest one-day percentage declines for all three benchmarks since June, and ended a four-day winning streak for the Nasdaq and a 10-day string of gains for the S&P 500 tech sector.
The selloff could be an indication of things to come, “where fundamentals play a larger part in valuations, as opposed to the irrational exuberance that has persisted in recent months within tech,” said Peter Essele, head of portfolio management for Commonwealth Financial Network. While the Dow fell more than 800 points, shares of JPMorgan Chase & Co. JPM, -0.31%, the world’s largest bank, declined only 0.3% and shares of Exxon Mobil Corp. XOM, -0.20%, the world’s largest oil company, lost only 0.2% after spending much of the day in the green. All 11 S&P 500 sectors fell, but energy shares lost only 0.6% and financials declined 1.6% — both are among the most out of favor in 2020, down nearly 43% and 19% year to date, respectively.
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