US equity indexes are tumbling on Thursday mainly pulled down by a selloff in technology and technology-related stocks which have pushed the market higher in recent weeks. The tech-heavy Nasdaq Composite Index is plunging almost 5%, while the Dow Jones Industrial Average is down 2.9%. The S&P 500 Index is declining 3.6%.
Next, investors will be looking out for Friday’s US monthly employment report, which is expected to show payrolls rebounded last month from lows seen during the coronavirus pandemic.
Tech selloff: The pullback is affecting a range of stocks from FAANG stocks with Apple leading the declines on the Dow Index plunging 6.6% to chip stocks pulling the Nasdaq down. Nvidia is down almost 9%, Advanced Micro Devices is falling 8% and Microsoft is dropping almost 6%.
Shares in Zoom Video Communications and Netflix are down 8.6% and 5% respectively after their shares were boosted in recent months as they benefited from consumers working and staying at home during the coronavirus pandemic.
Shares of Tesla are on a downward slope for another day declining more than 7%, which is taking the 3-day drop so far to 17%. The sell-off comes as one of the electric carmaker’s top shareholders divested part of its holding after the stock rallied 395% this year.
Meanwhile, Merrill Lynch analyst John Murphy sees room for more gains. Murphy hiked TSLA’s price target to $550 (33% upside potential) from $350. “It is important to recognize that the higher the upward spiral of TSLA’s stock goes, the cheaper capital becomes to fund growth, which is then rewarded by investors with a higher stock price,” the analyst wrote.
Earnings: Campbell Soup is sliding 8% after better-than-expected earnings and revenues in its fiscal 4Q failed to convince investors that the accelerated demand for its products during the lockdown period will sustain post-pandemic. The packaged food and beverage maker cautioned that sales are poised to grow at a slower pace in the second half of fiscal 2021 as lockdown restrictions ease.
“Moving on to the second half of fiscal 2021 we will be lapping the significant pantry load and one-time effect that COVID-19 had on our business in the second half of fiscal 2020. We do expect net sales to decline given the significant one-time nature of last year’s growth.” said Campbell’s CFO Mick Beekhuizen.
Rocket Companies is diving 13% after the mortgage firm posted its first results since going public last month. Profit-taking comes after the stock surged over 40% since the IPO and as the company sees slightly slower loan growth in its fiscal 3Q.
Intel has launched “Tiger Lake,” the 11th generation version of its core processor for thin-and-light laptops, which the chipmaker claims is 20% faster in its performance and has a better battery life than its predecessor. Northland Securities analyst Gus Richard reiterated a Sell rating on the stock with a $48 price target. “Intel is losing share to AMD and Apple is moving to its own CPU in notebooks. Data points do not paint a positive picture for INTC in 2H and beyond. Intel is on the wrong track and headed for you the shareholder,” Richard wrote in a note to investors.