Nasdaq Closes With More Than 2% Drop As Momentum Stocks Lose Steam

Apr 4 2014, 4:18pm CDT | by

If it initially looked like the markets would shake off Friday’s disappointing jobs report — which showed the U.S. added 192,000 jobs in March, slightly below the 200,000 economists expected, and the unemployment rate remains steady at 6.7% — the early-morning green was quickly replaced with red as momentum stocks slowed to a crawl and the S&P volatility index surged more than 6% Friday afternoon. Even popular tech names like Netflix, Priceline, Amazon and Facebook weren’t immune to the sea of red, failing to catch an upswing off of GrubHub’s immensely successful market debut and ranking among the day’s biggest losers.

After early morning gains on the weaker than expected jobs report, all three major indexes took a beating throughout Friday trading, but none more so than the Nasdaq, which was pummeled throughout the day and eventually closed with a 110-point drop, or a 2.6% decline, one of its worst performances of 2014 so far. Nearly every Nasdaq 100 component traded in the red on Friday, with the lone gainers a motley list of names:  networking storage company NetApp, security software company and Norton anti-virus creator Symantec, pharmaceutical company Mylan, and, inexplicably, struggling retailers Sears and Staples.

The S&P volatility index, one of the best gauges of investor fear, jumped more than 6% to a level of 14.22. Spurred by this fear, and possibly an investor movement to rebalance portfolios, popular tech names that have been thought of as momentum stocks lost their steam Friday, weighing down the Nasdaq 100. Travel booking company The Priceline Group closed the day with a $59 or 4.8% drop; video streaming service Netflix closed with a 4.9% decline; Facebook finished the day with a 4.66% drop and Amazon closed with a 3.18% decline.

The Nasdaq’s losses hit the other indices, too, leading the S&P to close 23.6 points, or 1.25%, in the red; the Dow, whose 30 components also traded largely in the red on Friday, closed with a 159-point drop, a decline amounting to a nearly 1% drop.

The bad economic and equity news proved good news for gold, which popped 1.5% on the bad jobs numbers and crossed back above the $1,300-mark. It closed at $1,303.50 an ounce, its biggest weekly gain since March 12. Silver and platinum futures also traded in the green on Friday, while copper ticked down 0.18%.

The one success story of the day was online food ordering service GrubHub, which, as Forbes’ Brian Solomon reported, priced shares above the expected range at $26, but they reached $39 a share at 10:42am ET — pushing the market capitalization over $3 billion. The market newbie — which operates, a Gen Y favorite — ultimately closed at $34.00, a 30.8% gain.


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

Cyber Monday 2015 Takes Over
Cyber Monday 2015 Takes Over
Black Friday 2015 is history. Here come the Cyber Monday 2015 deals.
Amazon Black Friday 2015 Sale is Live: The Best Deals
Amazon Black Friday 2015 Sale is Live: The Best Deals
The Black Friday 2015 sale on Amazon is an 8 Day event.
Amazon Black Friday 2015 Deals Unveiled
Amazon Black Friday 2015 Deals Unveiled
The Black Friday 2015 Deals offered in the Amazon Black Friday 2015 Sale are here.
Sam&#039;s Club Holiday Savings Celebration Sale 2015 Kicked Off Online
Sam's Club Holiday Savings Celebration Sale 2015 Kicked Off Online
The Sam's Club sale on Saturday November 14 is the first big Black Friday 2015 sale of the year and the Black Friday deals are online now ahead of the stores opening.