As another round of asset deflation took hold on Monday, the significance of the downside momentum has started to grow.
The unique thing about today’s stock market – because, at this point, lower oil, gold and silver are becoming an expected events – was the downshift by tech stocks, and specifically, those of the large-cap variety.
While the Dow Jones Industrial Average fell 47 points to 12,548 and the S&P 500 lost 8 points to 1329, the Nasdaq tumbled 46 points to 2782.
What’s more, the Nasdaq’s top 100 companies slid 1.7% as a whole, as long-term leaders Amazon.com (NASDAQ:AMZN) fell 5%, Netflix (NASDAQ:NFLX) lost 3.8% and Apple (NASDAQ:AAPL) dropped 2.2%.
That is a drop of 4.5% for Apple since May 10 – a staggering total of almost $14 billion in market cap, which is essentially equivalent to the size of a business like Staples (NASDAQ:SPLS).
A couple of troubling things jump out about these selloffs – the obvious one being that they come on no news at all and suggest a growing complacency by investors, or worse, a possible concern that nothing tangible exists to push these stocks higher.
Secondly, in the case of Apple, it’s worth noting that the stock’s recent slump was not from its 2011 high, as much of the broader market experienced. Due to the price-weighted impact of Apple on the tech index, a pattern of lower highs with the Nasdaq’s most important stock is definitely not bullish.
Of course, the Nasdaq also was hit on the small-cap side as well. With the selloff in most commodities – oil dipped 2.3% to $97.37 a barrel, while gold and silver both finished lower – the smaller energy and materials names that were so much a part of the recent eight-month rally in all assets (except for bonds) also headed lower.
Monday was another one of those days when the airline sector was one of the biggest outperformers, and while we all like a strong airline stock, as well as lower fuel prices, it has lately meant bad news for just about every other sector during a trading session.
Truer to the sentiment seemed to be the downturn in travel and tourism stocks, which one would normally assume would get a boost from a down day in crude. But Orbitz (NYSE:OWW) fell 4.5%, while Priceline.com (NASDAQ:PCLN) slumped 3.3%.
