Tech stocks tumble, backing Wall Street away from highs – Reuters

Technology stocks sold off on Friday, wounding the Nasdaq and holding down other major Wall Street indexes, which had touched record highs earlier in the session.

The technology sector .SPLRCT, which has soared this year and led the market’s rally, dropped 3.6 percent.

Apple (AAPL.O) shares fell 4.8 percent and were the biggest weight on the three major indexes, after a report that upcoming iPhones launched will use modem chips with slower download speeds than some rival smartphones.

Microsoft (MSFT.O), Facebook (FB.O) and Alphabet (GOOGL.O) all were off more than 3 percent, while chipmaker Nvidia (NVDA.O) traded down 8.8 percent at $147.60 after Citron Research said the stock could trade back to $130.

Shares of software company Cloudera (CLDR.N) tumbled 16.7 percent after its earnings report.

“Tech has been on a tear for a very, very long period of time,” said John Praveen, managing director for Prudential International Investments Advisers in Newark, New Jersey, adding that investors may be using the earnings report as “an excuse to take some profits.”

The Dow Jones Industrial Average .DJI fell 17.02 points, or 0.08 percent, to 21,165.51, the S&P 500 .SPX lost 15.88 points, or 0.65 percent, to 2,417.91 and the Nasdaq Composite .IXIC dropped 166.89 points, or 2.64 percent, to 6,154.87.

Countering tech’s slide, financials .SPSY rose 1.4 percent and energy shares .SPNY gained 2.3 percent as oil prices moved higher.

Investors were also digesting major political and economic events this week in the United States and Europe.

U.S. stocks had started the session strong after the results of the UK election, where British Prime Minister Theresa May’s Conservative Party lost its parliamentary majority.

Investors also viewed former FBI Director James Comey’s testimony on Thursday as not damaging enough to Donald Trump’s presidency.

Market watchers were concerned result of the Congressional hearing could derail Trump’s plans for lower taxes, fiscal spending and looser regulations, which have helped drive the S&P 500 up more than 13 percent since his election.

Focus was turning to the Federal Reserve’s meeting next week, when the U.S. central bank is overwhelmingly expected to raise interest rates.

“Markets are probably expecting that the Fed will raise rates, but they will be very gradual in removing monetary accommodation,” Praveen said.

Advancing issues outnumbered declining ones on the NYSE by a 1.50-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored advancers.

(Additiona reporting by Tanya Agrawal and Yashaswini Swamynathan in Bengaluru; Editing by Nick Zieminski)

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