US Stocks Drop As Rare Downgrade Spooks Large-Cap Tech Investors; Dow Buoyant
05:05 PM EDT, 05/10/2021 (MT Newswires) -- US stocks fell Monday, with tech megacaps especially weak after an early defection from the crowded bandwagons of brokerage analysts bullish on Facebook (FB) and Alphabet (GOOG).
The S&P 500 dropped 1% from Friday's record close to 4,188.43, while the Nasdaq Composite tumbled more than 2.5% to 13,401.86. The Dow Jones Industrial Average slipped just 0.1% from its own record close, settling at 34,742.82.
The Dow was buoyed by its health care, consumer staples, and industrial components; utilities and real estate stocks outperformed as well. Financials joined techs in the penalty box.
Copper prices in London spiked as much as 4% above Friday's record early Monday, aided by speculation from analysts that climate initiatives could lift prices much higher because electric vehicles use four times as much copper as conventional autos. But the metal closed lower in Chicago after its big run last week, and shares of leading EV maker Tesla (TSLA) shed 6% amid afternoon pressure on growth stocks.
Gasoline futures spiked 4% intraday as well after the Colonial Pipeline supplying some 45% of the US East Coast's gasoline and diesel was shut down late Friday following a ransomware cyberattack widely blamed by US government sources on hackers from Eastern Europe. By Monday afternoon the pipeline said it was gradually restoring service and gasoline gave back the entire spike as well. Crude oil finished little changed at $64.84 per barrel for West Texas Intermediate while US natural gas fell $0.03 to $2.93 per million BTU.
Facebook shares fell 4% and Alphabet's 2% after Citigroup downgraded both stocks to Hold from Buy, noting that while online advertising growth is set to continue it's likely to decelerate, challenging valuation multiples. Citi is now the only one of the 43 analyst firms tracked by Bloomberg not to rate Alphabet's stock a buy, Bloomberg reported. Facebook is a buy for 49 analysts with six neutral and three bearish, according to the news service.