Olde Hornet
Well-Known Member
https://www.schwab.com/resource-cen...ks-tumble-amid-technology-concerns?cmp=em-QYB
The U.S. stock market erased its gains for the year, as all the major stock indexes suffered sharp back-to-back losses in the days before the Thanksgiving holiday. The declines left the blue-chip Dow Jones Industrial Average and the broader S&P 500® Index very close to market correction territory, typically defined as a fall of 10% or more from a recent peak.
Concerns about the growth prospects of some of the biggest technology-related stocks—particularly, the so-called FAANG stocks (Facebook, Amazon, Apple, Netflix and Alphabet’s Google)—were initially to blame, as the outlook for earnings growth, the potential for regulatory changes and slowing global economic growth took their toll. However, as the tech giants sank, other parts of the market were eventually pulled into the spiral.
“The story is no longer just about tech stocks surrendering their leadership as market drivers,” says Liz Ann Sonders, Schwab senior vice president and chief investment strategist. “Now, an increasing number of highly leveraged companies are coming under pressure from rising interest rates, which make debt-financing more costly.”
The U.S. stock market erased its gains for the year, as all the major stock indexes suffered sharp back-to-back losses in the days before the Thanksgiving holiday. The declines left the blue-chip Dow Jones Industrial Average and the broader S&P 500® Index very close to market correction territory, typically defined as a fall of 10% or more from a recent peak.
Concerns about the growth prospects of some of the biggest technology-related stocks—particularly, the so-called FAANG stocks (Facebook, Amazon, Apple, Netflix and Alphabet’s Google)—were initially to blame, as the outlook for earnings growth, the potential for regulatory changes and slowing global economic growth took their toll. However, as the tech giants sank, other parts of the market were eventually pulled into the spiral.
“The story is no longer just about tech stocks surrendering their leadership as market drivers,” says Liz Ann Sonders, Schwab senior vice president and chief investment strategist. “Now, an increasing number of highly leveraged companies are coming under pressure from rising interest rates, which make debt-financing more costly.”