Nasdaq plummets to two month low
Nasdaq has experienced its worst opening since July, declining by 1.07 percent (48.70 points) to 4,518.90. The drop is a consequence of lackluster performance in the tech industry, with numerous tech firms reporting significant falls, including Microsoft, Netflix, Facebook, Twitter, and Yahoo Inc.
The Internet giants Facebook and Netflix both fell by 4% and Microsoft’s shares dropped by 45 cents to $46.24, which is thought to be caused by the confirmation of its acquisition of the game company Mojand (the developer of the game Minecraft).
Other tech companies that dropped include LinkedIn Corp. (which declined by 7.6% closing at $207.71), Seagate Technology (which declined by 3.6% closing at $58.84), Yahoo Inc (which declined by 0.8% to $42.55), and Twitter Inc. (which declined by 5.2% to $49.38).
In addition, Tesla Motors Inc. dropped by 9.1%.
The drop in these tech firms has resulted in a 0.6 percent drop in the S&P 500 technology sector, with the S&P 500 dropping by 1.41 points down to 1,984.13.
The Dow Jones Internet Composite Index fell by 2.3 percent.
The tech sector pulled Nasdaq to a two-month low as investors await Alibaba’s debut on the New York Stock Exchange.
Alibaba’s IPO is predicted to be one of the biggest debuts of all time and there appears to be very strong investor demand.
Michael James, a managing director of equity trading at Wedbush Securities Inc., told Bloomberg Businessweek:
“Growth is being sold today with both hands, whether it’s nervousness over the Fed, or in order to raise funds for the Alibaba allocation. If I’m going to get a million shares of Alibaba, I need to have money to buy that. If I need to sell five other stocks to raise that money, I will.”
It should be noted that Yahoo has a 23 percent stake in Alibaba and it is predicted to be worth much more next week than it is now.
However, despite the tech industry experiencing a plummet, the Dow Jones Industrial Average (DJIA) increased by 0.26% (43.6 points) to 17,031.14 at the end of the day.