Tech stocks weigh on Wall Street as Dow treads water

Technology stocks remained under pressure on Wall Street though stock prices ended the session without much change.

The tech-heavy Nasdaq Composite fell 0.85% at the close, underperforming the Dow industrials and the S&P 500.

The Dow Jones Industrial Average eased 9.29 points, or 0.04%, to 23,848.42, while the S&P was 0.3% lower at 2605.00. The Nasdaq finished at 6949.23.

The S&P 500’s information technology sector, which had fallen 5.8% over the past week, was down 0.9%. The consumer discretionary sector, which houses tech-focused giants such as Amazon.com and Netflix, dropped 1.2%.

Public reaction to how social-media firms manage user data and doubts that Facebook and Alphabet can extend their dominance in digital advertising have spurred negative investor sentiment.

“Those are the triggers that finally will force investors to look at the high valuations they’ve been paying for those stocks,” says Wasif Latif, vice president of equity investments at USAA Asset Management.

“Technology has been the poster child for growth, innovation and greater earnings, but has also been the poster child for higher [valuations].”

Shares of Facebook, which had fallen 18% since March 16 to the start of the session, rose 0.5% after the company said it would make it simpler for users to examine and change some of their data. 

Amazon feels White House heat
Amazon lost 4.4% amid speculation that the White House wants to clamp down on the e-commerce giant’s growing dominance.

Netflix declined 5.0% and Apple was down 1.1% after Goldman Sachs analysts lowered its iPhone demand estimates for the March and June quarters.

Elsewhere, electric vehicle manufacturer Tesla has dropped 7.7%, extending its Tuesday’s tumble amid an investigation into a fatal car crash. Moody’s also downgraded its debt.

Energy stocks in the S&P 500 fell 2% alongside oil prices after data showed inventories rose. US crude futures settled 87USc lower at $US64.38 a barrel. Brent slipped under $US 70 to settle at $US69.53.

The bond market has picked up as investors turn from tocks. The yield on the benchmark 10-year U.S. Treasury note fell to 2.777% from 2.790% on Tuesday, the lowest close since early February.

Meanwhile, optimism about the future of the world economy received a couple of boosts.

Fourth-quarter US economic growth was revised to 2.9%, higher than the previous estimate of 2.5% and a survey showed consumer sentiment in Germany was set to rise in April.

“The macro fundamentals haven’t dropped off the table,” says John Velis, macro strategist at State Street Global Markets. “They’re where they’ve been over the last several years, and that’s been a good place to be.” 

The Stoxx Europe 600 closed up 0.5%, paring earlier losses after falling by more than 1% in earlier trading. France's CAC 40 rose 0.3%, Germany's DAX fell 0.25% and the UK's FTSE 100 was up 0.6%