Sale of tech stocks continues
US Markets Remain Down - Dow Joins In. Semiconductor stocks, which had relaxed gains the previous day, take a hit again. Tech giants like AMD and Micron lost roughly two percent each.
Wall Street was weighed down by further losses in significant technology stocks on Thursday. The Dow Jones Industrial Average of blue-chip stocks initially climbed further but closed 1.3% lower at 40,665 points. The tech-heavy Nasdaq dropped 0.7% to 17,871 points. The broad-based S&P 500 lost 0.8% to 5,544 levels.
Semiconductor stocks regained some ground in early trading after Taiwan Semiconductor Manufacturing Company (TSMC) presented an optimistic outlook. However, investors soon refocused on concerns over the escalating trade war between the US and China. Titles of industry heavyweights like AMD and Micron lost around two percent each. "We had a recovery rally this morning due to TSMC, but the tech sector is overbought," noted Dennis Dick, trader at Triple D Trading.
Smaller companies' stocks also took a hit. The Russell 2000 Index of small-cap stocks interrupted its rally and slid 1.8% lower. The stock market barometer featuring companies like the online car dealer Carvana had risen by over 11% in July so far. With 2,224 points, it was close to the level it last reached in early 2022. "That was a bit too much and too fast for the Russell. Nothing goes up indefinitely," Dick added.
However, the upward trend in small-cap stocks is expected to continue in the coming weeks according to the expert. The background being the expectation of relatively low interest rates in the US soon. This has recently encouraged investors to invest in smaller companies instead of the previously booming technology stocks. It is anticipated that the economic recovery following the interest rate cut will improve the chances for less well-known companies.
Crushed Expansion Plans Weigh on Domino's
Companies outside the tech sector, including Domino's, came under pressure. Domino's Pizza shares fell by over 13% following a disappointing financial report. The company reported a surprising profit in the second quarter but will miss its target for international store openings in 2024. "This concerns investors because international growth was originally a key component of the company's long-term strategy," commented Jim Sanderson, analyst at Northcoast Research.
Shares of Beyond Meat also took a hit, losing over ten percent. Beyond Meat is reportedly in talks with bondholders about a debt restructuring, according to the "Wall Street Journal" citing sources.
Warner Bros Discovery saw a surge of 2.4%. The media giant is considering spinning off its studio and streaming business from its television divisions, according to a media report. The owner of CNN and HBO aims to boost the stock price, reported the "Financial Times".
Investors also showed interest in Commscope. The company's shares rose by 2.3%. Commscope plans to sell its infrastructure for mobile networks and its antenna systems business for $2.1 billion to reduce debt.
The Dow Jones Industrial Average, which includes notable blue-chip companies, joined the market downturn by closing 1.3% lower, negatively impacting stock trading in the broader economy. The stubborn trade war concerns between the US and China led to a decrease in stock prices for tech giants like AMD and Micron by approximately two percent each.
