The Nasdaq plunged when the stock market opened on Tuesday. (Photo: Getty Images)
MARKET REVIEW. Large technology companies fell Tuesday at the start of the session on Wall Street in a market worried about the rise in the 10-year bond rate and awaiting the hearing of the boss of the central bank (Fed) in front of American elected officials.
The Toronto Stock Exchange also fell sharply at the opening, weighed mainly by the health care sector which edged up 8% at the opening.
In Toronto, the S&P/TSX fell 297 points, or 1.62%, to 18,118 points.
In New York, the S&P 500 decreased 49 points, or 1.29%, to 3,826 points.
The Dow Jones was down 249 points, or 0.79%, to 31,272 points.
The Nasdaq plunged 423 points, or 3.13%, to 13,109 points.
Even more than the day before, where they had already been in difficulty, several American technological pillars were giving way, including Apple (-3,41%), Amazon (-1.96%) and Alphabet (-2,35%).
Tesla continued its tumble by unscrewing 8.64%.
This sharp decline was linked, according to several experts, to the rise in the rate on 10-year US Treasury bills, which stood at 1.3824% (+ 1.25%) and took nearly 50%. since the beginning of the year.
According to TD Ameritrade’s JJ Kinahan, tech stocks “performed extremely well last year as so many investors sought security from companies familiar and suited to the containment economy.”
“They do not tend to do as well with a rise in bond yields,” continues the expert. “For many of them, large caps are built on hopes of growth through strong results, but high returns act as a drag on income growth.”
Investors were also following the videoconference hearing of Fed Chairman Jerome Powell before the US Senate Banking Committee.
“Many observers are impatient to find out what Powell will say about growth coming out of the pandemic and wonder if he is worried about the risk of overheating,” Kinahan said.
The boss of the Fed will also speak Wednesday to elected representatives of the House of Representatives.
Boeing was down 1.50%, continuing to be penalized by the spectacular incident of a 777 that occurred on Saturday in the United States.
On Tuesday, the US aviation regulator said it was considering imposing more stringent engine inspections Pratt & Withney, with which the crashed model was equipped.
Despite better than expected quarterly results, the department store chain Macy’s (-3.66%) and the home equipment specialist Home Depot (-5.75%) retreated.
The chain of cinemas AMC rose 4.58% the day after New York State Governor Andrew Cuomo announced that theaters could reopen on March 5, nearly a year after they were closed due to a pandemic.