Amazon, Apple and Facebook Once led the market. Now they drive down.
Apple was worth more than $ 1 trillion in early November. Now it's valued at $ 880 billion.
The mighty tech titans and their apparently endless pipeline of profits, which ran one of the longest stock markets in stock, look a little less invincible. Shares in Apple and Google's parent company, Alphabet, are down by more than 10 percent since the market peaked, while Facebook and Amazon have fallen more than 20 percent.
Investor's belief has been extinct by slowing down growth and a trade crisis with China, as well as a steady stream of revelations about privacy lapses, security issues and mismanagement. If tech shares can not tear the fear, the rest of the market can feel the pain.
The vast amount of technology companies gives them great influence over the market – in both directions. The turmoil in technology on Monday pushed large stock indices to negative territory in November, and investors climbed to a gain of less than 1 percent for the year.
"You see extreme sales in the only favored area that everyone ran into," said Tony Dwyer, a market democrat with the Canaccord Genuity brokerage firm in New York.
The stock market seems to be disconnected from the rest of the US economy. Unemployment remains low and growth is on track for its best annual results since 2005. The third quarter results in the S & P 500 companies are expected to increase by 28 percent, according to the data company Refinitiv.
But investors are increasingly dirty about companies' prospects. Europe and China face economic weakness, while margins can be crushed by higher interest rates and rising labor costs.
"There is definitely a decline globally," said James Bianco, President of the Financial Market Research Bianco Research in Chicago. "The United States has definitely been stronger than the rest of the world. But fear is that can not hold. If the rest of the world is slowing it will eventually slow us down too. "
Shares in manufacturing companies, considered to be particularly exposed to increasing trade tensions with China, have fallen more than 10 percent since September. Economically sensitive financial shares have been 7.5 percent. Shares of residential builders who are vulnerable for rising prices, has fallen more than 30 percent.
The potential for higher borrowing costs also weighs on smaller companies that often borrow money by issuing floating-rate debt, which can be harder to pay off as interest rates rise. The Russell 2000 Index for small shares for capitalization is 14 percent lower than the high.
"This is simply a continuation of the recent reprint of risk or growth risk that we have initially seen since late September," said Talley Leger, an equity strategy with Oppenheimer Funds.
As the stock market hit its peak in September, technology had led the way, accounting for 50 percent of the profits for the year. The gnomes seemed primarily immune to sales that followed wider economic concerns.
No longer. By Friday, about a quarter of the market decline since September due to Amazon, Apple, Facebook and Alphabet, according to data collected by S & P Capital IQ. The sharp sale on Monday will only add that tally.
Investors seem specifically focused on some evidence that extraordinary profits generated by these giant technology companies are threatened.
The regulatory spectrum threatens Facebook shares, as it is about the fallout and costs of data breach, privacy loss and management errors. The pressure has only been reinforced by renewed review of its response to Russian efforts to use it to influence presidential elections in 2016. The stock dropped another 5.7 percent on Monday.
The alphabet also faces a violation of business practices in Europe, and concern from elected US officials in the political party. The company's shares fell almost 4 percent Monday.
Regulations are largely worrying technology defenders. Apple's CEO, Tim Cook, has warned that the new rules for the industry are "inevitable" when he told Axi us in an interview that was sent on Sunday .
"I strongly believe in the free market. But we must admit that the free market is not working he says," I think Congress and Administration will at some point pass by. "
Either technology store can loosen The concerns will depend, in part, on whether companies can continue to deliver strong earnings growth even though the global economy is shrinking. Recent earnings reports from major tech companies have made little effort to reassure investors.
Soft demand for Apple's new phones has damaged the shares and its suppliers. The month started with Apple issuing a lower expected sales forecast. Last week, one supplier warned that one of its largest customers had cut orders.
Since Apple's stock price peaked at just over $ 232 On October 3, the shares have fallen by almost 20 percent, leaving over 200 billion kroner of the company's market value. The company's shares were down at almost 4 percent t Monday.
Amazon reported a decline in core business revenue growth in late October, and sent shares lower. For investors, who often see revenue figures as a good measurement of the strength of demand in the economy, it was more important than the $ 2.9 billion in profits reported by the company.
But if they actually produce the figures that Wall Street analysts expect, the latest decline in major technology stocks could present a buying opportunity for some investors. Key figures for Apple and Alphabet hit several years in this summer. But the recent decline has left these valuations significantly lower. Prices on Facebook and Amazon are relatively low compared to expected earnings, which means that these shares look like "cheap" for some investors.
But they may have to be even cheaper before investors are tempted to snap them up. That is why some expect the sentiment in the market to be much worse before the shares can resume their climbing.
"I'm looking for a bit more bearishness," said King Lip, chief strategist at wealth management company Baker Avenue.
