By Matthew Craft
NEW YORK: A slump in Internet and other technology stocks pulled the broader market lower Friday, as traders turned on the same companies they flocked to earlier this year. Google, Netflix and other pillars of the Internet economy took a beating.
It was a bad day in an otherwise decent week. The Standard & Poor’s 500 index ended the week slightly higher.
Mixed signals in the government’s monthly jobs report gave investors little direction Friday. The government said that U.S. employers added more workers to their payrolls last month, but the overall report presented a mixed picture, and the unemployment rate remained at 6.7 percent.
The stock market crept higher to start, began losing steam at lunchtime and then turned lower in the afternoon. The jobs report wasn’t the culprit, said Uri Landesman, president of the hedge fund Platinum Management. It was likely the “momentum” traders, he said, people who chased high-flying stocks and are having a change of heart.
Tech stocks had soared over the past year, pushing the Nasdaq composite index up 28 percent, as traders piled into Internet and biotechnology companies. Netflix and Facebook, for instance, doubled in price over that time.
“It’s like [traders] took a look at some of these high-flying Internet companies and said, ‘How can I justify these prices?’ ” Landesman said.
The technology-heavy Nasdaq composite index plunged 110.01 points, or 2.6 percent, to close at 4,127.73, its biggest one-day drop since February.
The S&P 500 index fell 23.68 points, or 1.3 percent, to 1,865.09. The Dow Jones industrial average dropped 159.84 points, or 1 percent, to 16,412.71.
Utilities bucked the overall market and edged higher. Coca-Cola, Johnson & Johnson and other big corporations whose stocks are often less volatile than the broader market also made gains. Coca-Cola climbed 15 cents, or 0.4 percent, to $38.22.