U.S. Stocks See Further Downside Following Major IT Outage
19 Julho 2024 - 5:46PM
IH Market News
Stocks moved mostly lower during trading on Friday, with the
Nasdaq and the S&P 500 extending the steep drop seen over the
two previous sessions. The narrower Dow also moved to the downside,
pulling back further off the record closing high set on
Wednesday.
The major averages all finished the day firmly in negative
territory. The Dow slumped 377.49 points or 0.9 percent to
40,287.53, the Nasdaq slid 144.28 points or 0.8 percent to
17,726.94 and the S&P 500 fell 39.59 points or 0.7 percent to
5,505.00.
For the week, the major averages turned in a mixed performance.
The tech-heavy Nasdaq plunged by 3.7 percent and the S&P 500
tumbled by 2.0 percent, but the Dow climbed by 0.7 percent.
With concerns about the outlook for tech stocks recently
weighing on Wall Street, negative sentiment may have been generated
by a major IT outage.
The operations of major banks, media outlets, hospitals and
airlines worldwide were affected due to the widespread outage,
which was purportedly caused by an update by cybersecurity firm
CrowdStrike (NASDAQ:CRWD).
“CrowdStrike is actively working with customers impacted by a
defect found in a single content update for Windows hosts,” the
company’s CEO George Kurtz said on X. “Mac and Linux hosts are not
impacted.”
“This is not a security incident or cyberattack,” he continued.
“The issue has been identified, isolated and a fix has been
deployed.”
Shares of CrowdStrike plunged by 11.1 percent, while shares of
Microsoft (NASDAQ:MSFT) have also moved to the downside as many of
the software giant’s users have also been impacted by the
issue.
“The underlying cause has been fixed, however, residual impact
is continuing to affect some Microsoft 365 apps and services. We’re
conducting additional mitigations to provide relief,” Microsoft
said on X.
Overall trading activity was somewhat subdued, however, with a
lack of major U.S. economic keeping some traders on the
sidelines.
Sector News
Semiconductor stocks saw substantial weakness on the day,
dragging the Philadelphia Semiconductor Index down by 3.1 percent
to its lowest closing level in over a month.
A steep drop by the price of crude oil also contributed to
significant weakness among energy stocks, with the Philadelphia Oil
Service Index and the NYSE Arca Oil Index falling by 1.4 percent
and 1.2 percent, respectively.
Considerable weakness was also visible among computer hard
stocks, as reflected by the 1.3 percent loss posted by the NYSE
Arca Computer Hardware Index.
Gold, networking and tobacco stocks also saw notable weakness,
while pharmaceutical stocks regained ground following Thursday’s
sell-off.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region moved mostly lower during trading on Friday. Japan’s Nikkei
225 Index dipped by 0.2 percent, while Hong Kong’s Hang Seng Index
tumbled by 2.0 percent.
The major European markets also moved to the downside on the
day. While the German DAX Index slumped by 1.0 percent, the French
CAC 40 Index and the U.K.’s FTSE 100 Index slid by 0.7 percent and
0.6 percent, respectively.
In the bond market, treasuries pulled back further off their
recent highs following yesterday’s weakness. Subsequently, the
yield on the benchmark ten-year note, which moves opposite of its
price, climbed 5.0 basis points to 4.239 percent.
Looking Ahead
A report on personal income and spending in the month of June is
likely to be in focus next week, as it includes readings on
inflation said to be preferred by the Federal Reserve.
Leading up to the release of the report next Friday, earnings
news is likely to attract attention, with Coca-Cola (NYSE:KO),
Alphabet (NASDAQ:GOOGL), Tesla (NASDAQ:TSLA), and IBM Corp.
(NYSE:IBM) among the companies due to report their quarterly
results.
SOURCE: RTTNEWS
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