Technology stocks fall, lead losses on Wall Street | Reuters - Firstpost
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Technology stocks fall, lead losses on Wall Street | Reuters

Updated: Feb 6, 2016 03:00 IST

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The Nasdaq led a selloff on Wall Street following weak forecasts from technology companies, including LinkedIn (LNKD.N), and worries about lofty valuations.

LinkedIn was down 45 percent at $105.67 a day after the company's revenue forecast missed estimates. Tableau Software (DATA.N) was down 49.5 percent at $41.30, also after a disappointing forecast.

Big tech names also sank, including Facebook shares, which dropped 5.7 percent to $104.20, while Alphabet (GOOGL.O) fell 3 percent to $707.97 and Amazon (AMZN.O) slid 6.6 percent to $500.17. Netflix was down 8.1 percent at $82.42.

Stocks like Amazon and Netflix (NFLX.O), both of which more than doubled in price last year, have been favorites with hedge funds. Amazon rose 117.8 percent last year while Netflix jumped 134.4 percent.

While hedge funds have been bullish on these names, Friday's action may suggest some may be taking a harder look at valuations.

"Tech has got a few shining examples of what happens if you disappoint," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "When that happens, that calls into question the valuations of all high-multiple stocks."

Early market weakness followed data showing the U.S. unemployment rate hit an eight-year low in January. That revived the prospect of a Fed rate hike this year.

Nonfarm payrolls increased by 151,000 jobs last month, below the 190,000 expected by economists polled by Reuters as the boost to hiring from unseasonably mild weather faded.

At 3:39 p.m. (20:39 GMT), the Dow Jones industrial average .DJI was down 246.98 points, or 1.5 percent, to 16,169.6, the S&P 500 .SPX had lost 39.1 points, or 2.04 percent, to 1,876.35 and the Nasdaq Composite .IXIC had dropped 149.88 points, or 3.32 percent, to 4,359.68.

Declining issues outnumbered advancing ones on the NYSE by 2,318 to 713, for a 3.25-to-1 ratio on the downside; on the Nasdaq, 2,216 issues fell and 555 advanced for a 3.99-to-1 ratio favoring decliners.

The S&P 500 posted 7 new 52-week highs and 26 new lows; the Nasdaq recorded 3 new highs and 180 new lows.

(Additional reporting by Tanya Agrawal and Abhiram Nandakumar; Editing by Nick Zieminski and Dan Grebler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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