U.S. stocks fall, led by tech-related shares
STORY: U.S. stocks ended lower on Friday, as Big Tech shares fizzled and consumer sentiment dropped to a six-month low.
The Dow closed down fractionally, the S&P 500 shed nearly two-tenths of a percent and the Nasdaq lost more than three-tenths.
Tesla shares gave back the 2-percent gain from Thursday when Elon Musk announced that he had found a new CEO for Twitter. Friday he named former NBCUniversal advertising chief Linda Yaccarino to the top spot. This presumably allows Musk to focus more on the EV-maker, though he did say he would remain involved in Twitter’s product design and new technology.
Apple was among the biggest drags on the S&P technology index, which was down for the day but is still up about 22% so far this year.
May consumer sentiment dropped to its lowest since November as a standoff to lift the federal government's borrowing cap raised worries about the economic outlook.
Investors are also concerned that the Federal Reserve's aggressive interest rate hikes could push the economy into recession.
Mike Mussio, President of FBB Capital Partners, says that investors shouldn’t be too quick to hope for rate cuts either – something the market has priced in to occur by September.
“I think the September cut scenario is predicated on the economy materially deteriorating between now and then. So I'm not sure we should be rooting for that. Market participants seem to be eager to price in when the cut is going to come, but we keep in mind that if they are cutting, they're seeing something underneath the hood that doesn't seem to be able to, you know - the engine is not running a-OK and that's not necessarily a great thing for the economy, or for markets.”
Among gainers, First Solar shares jumped 26-percent after the solar panel maker acquired Sweden's thin-film solar cell technology firm Evolar AB.
And News Corp shares soared 8-percent after the media giant beat Wall Street estimates for its third-quarter profit.