Big Correction Underway For Mega Caps

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as a big correction underway for mega caps. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

Dow futures jump 200 points in overnight trading following the worst tech rout since March

Stocks futures climbed in overnight trading on Monday after technology shares suffered their worst sell-off in more than five months. Futures on the Dow Jones Industrial Average gained about 215 points, while the S&P 500 futures rose 0.5%. The Nasdaq 100 futures, however, dipped 0.2%.

The S&P 500 (SPY) lost -2.78% today. All 11 sectors fell deep into the red as shown below in the sector graph. Losses ranged from -3.64% to less than 1%.

The Dow Jones index declined -632 points (-2.25%) to close at 27,500. The Nasdaq fell -465 points (-4.11%) to settle at 10,847.

Big Correction Underway For Mega Caps

Stocks felt selling pressure on Tuesday as a drop in technology put the Nasdaq Composite in correction territory. Tuesday’s drop put the tech-heavy Nasdaq down 10% over the past three days.

Apple dropped 6.7% to lead tech lower. Over the past three sessions, the Dow component has plunged more than 14%. Facebook and Amazon were both down more than 4%. Microsoft fell 6.7%. Netflix closed 1.8% lower and Alphabet lost 3.6%. Zoom Video fell by 5.1%. The S&P 500 tech sector dropped 4.6% and closed Tuesday’s session more than 11% below an all-time high set on Sept. 2.

“High valuations in the mega-cap stocks are stretched far beyond historical levels,” said Bruce Bittles, chief investment strategist at Baird.

Wall Street was coming off its first weekly decline in six weeks after a big reversal in major technology stocks. Steep losses in AmazonApple, Microsoft and Facebook — 2020′s market leaders — drove the tech-heavy Nasdaq Composite to its worst week since March 20. The Dow and S&P 500 posted their biggest weekly losses since June.

Many on Wall Street believe the weakness derived from worries that the massive tech run-up pushed valuations to unsustainable levels. Even with last week’s pullback, the Nasdaq is up more than 70% from its March bottom.

Key Takeaways…

Notable S&P 500 Movers….

Below I’ve highlighted some notable S&P 500 movers (both winners & losers).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

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9/8/20

S&P 500 Sector Graph

Big Correction Underway For Mega Caps

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Big Correction Underway For Mega Caps

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S&P 500 Sector Heat Map

 

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