The Dow finished the day down 202 points, a drop of nearly 0.8%. The S&P 500 fell almost 1%. And the Nasdaq was down about 1.7%, dragged lower by big drops in shares of tech titans Apple (AAPL
), Amazon (AMZN)
and Google owner Alphabet (GOOGL
Concerns about the continued slide in oil prices
as crude fell for the tenth straight day and the possibility the US-China trade war will lead to a slowdown in China’s economy dragged the broader market lower.
A stronger dollar
wasn’t helping either, since the rise of the greenback eats into profits of blue chip US firms.
Investors were also still digesting Thursday’s announcement from the Federal Reserve. The Fed did not raise rates but strongly suggested another hike is coming in December. That was also one of the reasons for the dollar’s gains.
The market may be underestimating how many more rate hikes there will be, Larry Hatheway, chief economist at GAM Investments, told CNN Business.
“The Fed has consistently raised rates more than expected. That may continue to be the case,” he said. Hatheway added that investors may also be growing nervous about earnings growth slowing in 2019 and that rising wages will eat into profit margins.
But despite Friday’s losses, the broader market should still end the week in positive territory — thanks to the post-Election Day rally Wednesday.
Investors cheered the possibility of gridlock in Washington as Democrats won control of the House while Republicans maintained a majority in the Senate.
The Dow rallied by nearly 3% this week — its best performance since March — while the S&P 500 gained more than 2%. The Nasdaq was up less than 1%.
In corporate news, General Electric (GE
) plunged 6% after an analyst at JPMorgan Chase slashed his price target
on the troubled conglomerate to just $6 a share. GE has lost more than half its value this year.
Several tech companies reported earnings and outlooks that disappointed investors as well, including gaming giant Activision Blizzard (ATVI
), online retailer and bitcoin investor Overstock (OSTK
) and reviews site Yelp (YELP
Activision and Overstock were each down about 15% while Yelp plummeted nearly 30%.
Shares of Chinese online retail giant Alibaba (BABA
) fell 3% despite the fact that the company is gearing up for Singles’ Day — an annual shopping extravaganza for Chinese consumers — on Sunday. (Singles’ Day is always 11/11 — a day of four ones.)
The one notable bright spot on the earnings landscape? Media giant Disney (DIS
) impressed investors with solid results from its movie studio business. Disney’s stock was up 2%
and hit its highest level in nearly three years.
But shares of streaming media king Netflix (NFLX
) dipped more than 4.5% — partly due to the fact that Disney CEO Bob Iger announced more content plans for the company’s upcoming Netflix rival, which will be called Disney+.