By Rex Crum and Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Shares of Facebook, Yahoo and
Netflix took a beating on Tuesday afternoon as investors targeted
some of the tech sector's best performing stocks of the year in a
hard, market-wide selloff.
The selloff deepened as the day progressed, with the Dow off
more than 110 points and the S&P 500 slipping by nearly 1%. But
tech stocks -- which have outperformed the broader market this year
-- were hit harder. The Nasdaq Composite Index (RIXF) was last down
1.8% to 3,701 while the Morgan Stanley High-Tech Index (MSH) fell
2% and the Philadelphia Semiconductor Index (SOX) was down by
1.5%.
The broad selloff was pegged to the continued effect of the
federal government shutdown, which has entered its second week with
no resolution in site. Robert Pavlik, chief market strategist at
Banyan Partners, told MarketWatch that the effect of the shutdown
was having a "particularly negative effect on so-called 'momentum'
stocks like Facebook Inc., Priceline.com Inc., and Tesla Motors
Inc."
By early afternoon, Facebook (FB) shares were off 5.8% to $47.64
while Netflix (NFLX) was off by 5% to $302.22 and Yahoo (YHOO) was
down 4.5% to $32.61. Priceline (PCLN) was down 4.7% at last
check.
Those four have been among the strongest performers in the tech
sector this year; Netflix shares were up nearly 225% from the first
of the year, while Facebook is up more than 77% and Yahoo has
surged by 62%. Priceline shares have gained more than 60% for the
year to date.
H-P (HPQ) was off by 0.6% to $20.80 a share, a day ahead of the
company's annual meeting with Wall Street financial analysts.
Social-networking stocks were among those having a rough day,
with LinkedIn Corp. (LNKD) off by 6% at $222.40; Angie's List Inc.
(ANGI) down more than 6.4%, at $15.04 and Yelp Inc. (YELP) off more
than 7%.
There was some speculation that continuing stock-market losses
may provide an impetus for U.S. lawmakers to reach some compromise
with President Barack Obama over the federal government shutdown
and budget crisis.
Among other tech stocks, Seagate Technology (STX) shed 8 cents a
share to trade at $45.08. The hard-disk drive maker said it
purchased 32.7 million shares of its stock from Samsung Electronics
Co. Samsung had received 45 million shares of Seagate stock when
Seagate bought Samsung's hard-disk drive division in 2011. Samsung
still owns about 12.5 million shares of Seagate stock.
Apple (AAPL) fell almost $5 a share to $482.84 following reports
that the company will expand its iTunes Radio service to the United
Kingdom and Canada by early 2014. Pandora Media Inc. (P), which is
considered the leading Internet radio company, yet doesn't have
service agreements in the U.K. or Canada, was down nearly 8% at
$24.31 a share.
Amazon.com Inc. (AMZN) shed 2.5%, and IBM Corp. (IBM) was down
by 1.6%, at $179.62. A U.S. federal court ruled in favor of Amazon
in a case involving a cloud computing contract with the Central
Intelligence Agency. IBM wanted the government to reopen the $600
million contract, which the CIA had awarded to Amazon.
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