NEW YORK (AP) — Wall Street was rocked Thursday by a drop in technology stock prices, while the value of bitcoin suffered further losses to stand at about half the record it had set late last year. Several discouraging reports on the US labor market also contributed to the decline in bond market yields.
The S&P 500 fell 1.2% to close with losses for the sixth time in the last seven days since reaching an all-time high. The Dow Jones Industrial Average lost 1.2%, and the Nasdaq composite fell 1.6%.
Qualcomm fell 8.5% for one of the market’s biggest losses, even though the chip company beat analysts’ expectations for profit and revenue in the latest quarter. Its earnings forecast for the current quarter fell short of analyst expectations, as a widespread shortage of memory chips is leading some phone makers to reduce orders.
In the Treasury market, yields fell after a report indicated that the number of workers filing for unemployment benefits in the United States rose more last week than economists expected. That could be a sign that the pace of layoffs is accelerating.
Some economists indicated that last week’s increase could be statistical noise, and that the total number remains relatively low compared to history. But a separate report noted that layoffs announced by U.S.-based employers spiked last month. The figure of 108,435 was the highest for a month since October, according to global executive coaching and outplacement firm Challenger, Gray & Christmas.
For a January, it is the worst since 2009 during the Great Recession.
A third US government report indicates that employers were advertising the lowest number of job openings in December in more than five years.
Weakness in the labor market could push the Federal Reserve to cut interest rates to support the economy, even if it also risks worsening inflation.
The yield on the 10-year Treasury note sank from 4.29% to 4.19%. That’s a notable move for the bond market.
The moves were even more pronounced in commodity markets.
The price of silver has fallen 9.1% since its record momentum came to a sudden halt last week.
The price of gold fell 1.2% to settle at $4,889.50 per ounce. It has been swinging since roughly doubling its price in 12 months. It approached $5,600 last week and then fell below $4,500 on Monday.
Both gold and silver had been soaring as investors sought havens they thought would be safer amid concerns about political turmoil, a U.S. stock market that critics called expensive, and huge debt burdens for governments around the world. But nothing can continue to rise at such extreme rates forever, and critics had been calling for a correction.
Bitcoin, which is presented as “digital gold”, also sank. Like gold, bitcoin produces no profits or dividends, and its price depends on what investors are willing to pay for it. It briefly fell more than 12% to trade below $64,000, compared with a record of more than $124,000 set in October.
The drop dragged down the shares of companies involved in the cryptocurrency industry. Coinbase Global, the cryptocurrency trading platform, fell 13.3%. Strategy, which has made a business of buying and holding bitcoin, plummeted 17.1%.
Outside of cryptocurrencies, Alphabet closed down 0.5% even though the parent company of Google, YouTube and other businesses reported a stronger profit for the latest quarter than analysts expected. Investors focused more on how much Alphabet is spending on AI technology and questioned whether it will all be worth it.
Alphabet said its spending on equipment and other investments could double this year to about $180 billion. That beat analyst expectations of less than $119 billion, according to FactSet.
Estee Lauder also beat Wall Street targets, raising some of its financial forecasts for the full fiscal year. But analysts said investors may have been waiting even longer. Shares of the New York cosmetics company fell 19.2%.
On the winning side of Wall Street were the companies that stand to benefit from big spending by Alphabet and others continuing the AI craze. Chip company Broadcom gained 0.8%.
McKesson jumped 16.5% after reporting stronger earnings and revenue for the latest quarter than analysts expected. The healthcare company also raised its earnings forecast range for this fiscal year.
Ultimately, the S&P 500 fell 84.32 points and closed at 6,798.40. The Dow lost 592.58 points to settle at 48,908.72, and the Nasdaq composite plummeted 363.99 points to settle at 22,540.59.
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Associated Press writers Matt Ott and Elaine Kurtenbach contributed to this report.
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This story was translated from English by an AP editor with the help of a generative artificial intelligence tool.
