The Nasdaq Composite shed 1.46% by the end of Friday’s trading session with stocks like Intel Corp, Western Digital Corp and Electronic Arts helping to drag the index down collectively.
The losses took a toll on technology ETFs like Invesco QQQ Trust (NASDAQ: QQQ)–down 1.35%, Technology Select Sector SPDR ETF (NYSEArca: XLK)–down 1.71%, Vanguard Information Technology ETF (NYSEArca: VGT)–down 1.95%, First Trust Dow Jones Internet ETF (NYSEArca: FDN)–down 3.06%, and iShares US Technology ETF (NYSEArca: IYW)–down 2.02%.
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Overall, tech stocks posted their second straight day of deep declines, as the sector dropped more than 1.5 percent on Thursday as a result of Facebook posting its worst trading day ever. In addition, shares of Intel and Twitter extended the losses for the Nasdaq on Friday after releasing their latest quarterly results.
“When growth companies, particularly tech companies, are priced to perfection, the price for imperfection is quite high,” said Michael Arone, chief investment strategist at State Street Global Advisors. “Meanwhile, the reward for beating on earnings is much lower than usual.”
Intel lost more than 8.5%, citing delays on its next generation chips, but the chipmaker did report better-than-expected earnings. Also in the Nasdaq, Facebook and Apple shares dropped 0.8 percent and 1.7 percent, respectively.
The losses in the Nasdaq juxtaposed the Commerce Department reporting that the U.S. economy grew by 4.1 percent in the second quarter, meeting consensus expectations by economists. Nonetheless, other indices closed the trading day in the red–the S&P 500 ended down 0.66% and the Dow closed 0.30% down.
However, the Nasdaq is still trading above its 50-day moving average and continues to trend upward based on its year-to-date chart.
“While we may be late in the game when it comes to our economic expansion, we’re likely not in the last inning, and I think we see that in today’s numbers,” said Mike Loewengart, vice president of investment strategy at E-Trade. “Sure the trade war has begun to take its toll, but our economic fundamentals continue to be solid.”
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Despite the losses today, over 50 percent of S&P 500 companies have reported earnings. Of those companies, 79.8 percent have reported better-than-expected earnings, according to data provided by FactSet.
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