The Nasdaq 100 sank by at much as 5.4% at its worst levels in its biggest drop since June as Apple (AAPL), Tesla (TSLA) and Amazon (AMZN) each fell by at least 5%. The index, which has advanced in 11 of the last 13 sessions and closed at record levels nearly daily over the last several weeks, is today's underperformer as bears have retaken control, at least so far this morning. While the Nasdaq has bounced back a bit, it is still down over 4% at noon while the S&P is down nearly 3% and the Dow is down about 2%.
ECONOMIC EVENTS: In the U.S., initial jobless claims dropped 130,000 to 881,000 in the week ended August 29. The trade deficit widened by much more than expected to a 12-year high of $63.6B in July from $53.5B in June. Markit's services PMI rose to 55.0 in the final read for August, up from the 54.8 preliminary reading. The ISM services index fell 1.2 points to 56.9 in August, which was fractionally below expectations. The estimate of Q2 productivity was revised higher to a 10.1% pace of growth versus 7.3% in the preliminary report.
TOP NEWS: Facebook (FB) shares slipped 5% after CEO Mark Zuckerberg announced that the company will be taking additional steps to "help secure the integrity of the U.S. elections." As part of these steps, the social media giant will not accept new political advertisements in the week before the U.S. presidential election in November.
Shares of Tesla have slipped an additional 7.5%, compounding yesterday's losses after U.K. fund manager Baillie Gifford disclosed in a regulatory filing yesterday morning that it has reduced its stake in the electric carmaker to 4.25%. Meanwhile, QuantumScape (QS), the battery supplier for electric vehicles backed by Microsoft (MSFT) co-founder Bill Gates and Volkswagen (VWAGY), has announced that it plans to go public through a special purpose acquisition company, or SPAC. The deal mirrors that of Nikola (NKLA), which went public in June through a reverse merger with VectoIQ, and that of Lordstown Motors, which will merge with DiamondPeak Holdings (DPHC), another SPAC.
On the earnings front, PVH Corp. (PVH) shares were 5% higher near noon after the company reported better than expected second quarter results, exceeding CEO Emanual Chirico's expectations. Of note, the company said it expects revenue for the second half of the year to fall about 25% compared to last year.
Meanwhile, Campbell Soup (CPB) shares fell 6% after the company reported quarterly results and provided guidance for the first quarter.
MAJOR MOVERS: Among the noteworthy gainers was Fulgent Genetics (FLGT), which rose 16% after the company and New York City Health and Hospitals announced they will provide COVID-19 testing to hundreds of thousands of students across approximately 1,600 locations as they return to school in September and over the next several months. Also higher was Sutro Biopharma (STRO), which gained 15% after the company reported "promising" interim Phase 1 clinical data from STRO-002.
Among the notable losers was Akebia (AKBA), which plunged 73% after vadadustat did not meet the primary safety endpoint of the PRO2TECT program, defined as non-inferiority of vadadustat versus darbepoetin alfa in time to first occurrence of major adverse cardiovascular events. Also lower were Zuora (ZUO) and Ciena (CIEN), which fell 32% and 26%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was down 620.23, or 2.13%, to 28,480.27 , the Nasdaq was down 518.59, or 4.30%, to 11,537.85 , and the S&P 500 was down 103.70, or 2.90%, to 3,477.14 .
