Financial Markets                      04/19 16:31

   

   NEW YORK (AP) -- The worst week for big technology stocks since the COVID 
crash in 2020 dragged Wall Street on Friday across the finish line of another 
losing week.

   The S&P 500 dropped 0.9% to close out its third straight losing week. That's 
its longest such streak since September, before it broke into a romp that sent 
it to a string of records this year.

   The Nasdaq composite sank 2%. The Dow Jones Industrial Average, which has 
less of an emphasis on tech, was an outlier and rose 211 points, or 0.6%.

   The market's worst performers included several stocks that had been its 
biggest stars. Super Micro Computer lost more than a fifth of its value, 
dropping 23.1%. The company, which sells server and storage systems used in AI 
and other computing, had soared nearly 227% for the year coming into the day.

   Nvidia, another stock that has surged to dizzying heights due to Wall 
Street's frenzy around artificial-intelligence technology, also gave up some of 
its big recent gains. It slumped 10% and was the heaviest single weight on the 
S&P 500, by far, because of its huge size.

   Tech stocks in the S&P 500 broadly lost 7.3% this week for their worst 
performance since March 2020 as some global giants reported discouraging 
trends. ASML, a Dutch company that's a major supplier to the semiconductor 
industry, reported weaker-than-expected orders for the start of 2024, for 
example.

   The larger threat was a dawning, dispiriting acknowledgement sweeping Wall 
Street that interest rates may likely stay high for longer.

   Top Fed officials said this week that they could hold interest rates at 
their high level for a while. That's a letdown for traders after the Fed had 
signaled earlier that three cuts to interest rates could be possible this year.

   High rates hurt prices for all kinds of investments. Some of the hardest hit 
tend to be those seen as the most expensive and which make investors wait the 
longest for big growth, which can make tech stocks vulnerable.

   Lower rates had earlier appeared to be on the horizon after inflation cooled 
sharply last year. But a string of reports this year showing inflation has 
remained hotter than expected has raised worries about stalled progress.

   Fed officials are adamant that they want to see additional proof inflation 
is heading down toward their 2% target before lowering the Fed's main interest 
rate, which is at its highest level since 2001.

   Traders are now largely forecasting just one or two cuts to rates this year, 
according to data from CME Group, down from expectations for six or more at the 
start of the year. They're also betting on the possibility of no cuts to rates 
this year.

   But Brian Jacobsen, chief economist at Annex Wealth Management, expects 
inflation to moderate as U.S. households that have become "hypersensitive to 
price hikes" by businesses begin slowing their spending.

   "The giant sucking sound of optimism (escaping) from the market is due to 
the Fed's lack of foresight and irrational focus on where inflation has been 
instead of where it's going," he said.

   Because interest rates look unlikely to offer much help in the near term, 
companies are under even more pressure to deliver growth in profits. The recent 
drops in price have cooled a bit of the criticism that stocks had grown too 
expensive, but they won't look cheap unless either prices fall further or 
profits jump higher.

   Netflix sank 9.1% despite reporting stronger profits for the latest quarter 
than expected. Analysts called it a mostly solid performance, but the streaming 
giant disappointed some investors by saying it will stop giving updates on its 
subscriber numbers every three months, beginning next year.

   Helping to limit the market's losses was American Express, which rose 6.2%. 
It reported stronger profit for the latest quarter than analysts expected. 
Fifth Third Bancorp rose 5.9% after it likewise topped expectations.

   All told, the S&P 500 dropped 43.89 points to 4,967.23. It's 5.5% below its 
record set late last month.

   The Dow Jones Industrial Average rose 211.02 to 37,986.40, and the Nasdaq 
composite fell 319.49 to 15,282.01.

   In the oil market, a barrel of Brent crude pulled back to $87.29 after 
briefly leaping above $90 overnight on worries about fighting in the Middle 
East. Iranian troops fired air defenses at a major air base and a nuclear site 
during an apparent Israeli drone attack, raising worries in the market. But 
crude prices pared their gains as traders questioned how Iran would respond.

   In the bond market, the yield on the 10-year Treasury eased to 4.62% from 
4.64% late Thursday to trim its gain for the week. It had been down more 
overnight, when worries were spiking about a potentially broadening war in the 
Middle East.

   In markets abroad, stock indexes were mixed in Europe after falling more 
sharply in Asia.

   ___

   AP Writers Matt Ott and Zimo Zhong contributed.

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