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U.S. stock markets closed sharply lower on Friday following a global cyber outage that rattled investors after severe disruptions of operations of several industries across the world. Moreover, Wall Street continues to witness sector rotations form AI-centric technology giants to rate-sensitive cyclical stocks and small-caps. All three major stock indexes ended in negative territory. For the week, the S&P 500 and the Nasdaq Composite finished in negative zone, while the Dow ended in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was down 0.9% or 377.49 points to close at 40,287.53. Notably, 22 components of the 30-stock index ended in negative territory while 8 in positive zone. The tech-heavy Nasdaq Composite finished at 17,726.94, sliding 0.8% or 144.28 points due to weak performance by technology behemoths.
The S&P 500 fell 0.7% to finish at 5,505. Nine out of the 11 broad sectors of the broad-market index ended in negative territory, while two in positive zone. The Technology Select Sector SPDR (XLK), the Energy Care Select Sector SPDR (XLE) and the Financials Select Sector SPDR (XLF) tumbled 1.6%, 1.1% and 1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 3.7% to 16.52, marking its highest level since late April. A total of 10.54 billion shares were traded on Friday, lower than the last 20-session average of 11.72 billion. Decliners outnumbered advancers on the NYSE by a 2.11-to-1 ratio. On Nasdaq, a 1.91-to-1 ratio favored declining issues.
Global Cyber Outage
On Jul 19, several industries including aviation, banking and financial services, and healthcare across the world suffered severe disruptions in operations due to a software glitch. Some TV broadcasters also went offline.
The outage happened following the technical update of a software of the giant cybersecurity provider CrowdStrike Holdings Inc. (CRWD - Free Report) significantly disrupted normal functioning of Microsoft Corp.’s (MSFT - Free Report) Windows-based operating systems.
CrowdStrike CEO George Kurtz said, “CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. “This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed.” Microsoft also issued a statement stating its cloud services were restored after a cybersecurity outage.
The yield on the benchmark 10-Year U.S. Treasury Note rose 5.5 basis points to 4.283%. The dollar index, which measures the greenback against a basket of six major currencies, gained 0.2% to 104.36. Bitcoin, the largest cryptocurrency of the world, hits $66,500, its highest level since Jun 18.
Weekly Roundup
Last week was a mixed one for Wall Street. The S&P 500 and the Nasdaq Composite slipped 2% and 3.7%, respectively, reflecting these two indexes worst weekly performance since April. These indexes suffered as market participants shifted their preference from over-valued A.I.-centric technology giants to beaten-down cyclical stocks. The Nasdaq Composite also terminated a six-week winning streak.
On the other hand, the Dow gained 0.7% as this index is more inclined toward rate-sensitive cyclical sectors. Moreover, small-cap-centric Russell 2000 also gained 1.7% as this segment also becomes a beneficiary of recent sector rotations.
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Stock Market News for Jul 22, 2024
U.S. stock markets closed sharply lower on Friday following a global cyber outage that rattled investors after severe disruptions of operations of several industries across the world. Moreover, Wall Street continues to witness sector rotations form AI-centric technology giants to rate-sensitive cyclical stocks and small-caps. All three major stock indexes ended in negative territory. For the week, the S&P 500 and the Nasdaq Composite finished in negative zone, while the Dow ended in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was down 0.9% or 377.49 points to close at 40,287.53. Notably, 22 components of the 30-stock index ended in negative territory while 8 in positive zone. The tech-heavy Nasdaq Composite finished at 17,726.94, sliding 0.8% or 144.28 points due to weak performance by technology behemoths.
The S&P 500 fell 0.7% to finish at 5,505. Nine out of the 11 broad sectors of the broad-market index ended in negative territory, while two in positive zone. The Technology Select Sector SPDR (XLK), the Energy Care Select Sector SPDR (XLE) and the Financials Select Sector SPDR (XLF) tumbled 1.6%, 1.1% and 1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 3.7% to 16.52, marking its highest level since late April. A total of 10.54 billion shares were traded on Friday, lower than the last 20-session average of 11.72 billion. Decliners outnumbered advancers on the NYSE by a 2.11-to-1 ratio. On Nasdaq, a 1.91-to-1 ratio favored declining issues.
Global Cyber Outage
On Jul 19, several industries including aviation, banking and financial services, and healthcare across the world suffered severe disruptions in operations due to a software glitch. Some TV broadcasters also went offline.
The outage happened following the technical update of a software of the giant cybersecurity provider CrowdStrike Holdings Inc. (CRWD - Free Report) significantly disrupted normal functioning of Microsoft Corp.’s (MSFT - Free Report) Windows-based operating systems.
CrowdStrike CEO George Kurtz said, “CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. “This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed.” Microsoft also issued a statement stating its cloud services were restored after a cybersecurity outage.
Following these developments, the stock price of CrowdStrike plummeted 11.1% while that of Microsoft fell 0.7%. Microsoft currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Developments
The yield on the benchmark 10-Year U.S. Treasury Note rose 5.5 basis points to 4.283%. The dollar index, which measures the greenback against a basket of six major currencies, gained 0.2% to 104.36. Bitcoin, the largest cryptocurrency of the world, hits $66,500, its highest level since Jun 18.
Weekly Roundup
Last week was a mixed one for Wall Street. The S&P 500 and the Nasdaq Composite slipped 2% and 3.7%, respectively, reflecting these two indexes worst weekly performance since April. These indexes suffered as market participants shifted their preference from over-valued A.I.-centric technology giants to beaten-down cyclical stocks. The Nasdaq Composite also terminated a six-week winning streak.
On the other hand, the Dow gained 0.7% as this index is more inclined toward rate-sensitive cyclical sectors. Moreover, small-cap-centric Russell 2000 also gained 1.7% as this segment also becomes a beneficiary of recent sector rotations.