Both the NASDAQ & the S&P 500 experienced drops this Friday registering their largest losses in more than 3 months as concerns with regard to the poor global growth & a drop in Biogen's stock proved to be the major variables for the decline.
The Dow Jones Industrial average saw its largest slump in 6 months. It fell by 163.39 points to close the week at 17568.53 while the S&P 500 fell by 22.5 points to end at 2079.65. NASDAQ lost 57.78 points to close at 5088.63. At 2.2 & 2.3% respectively, this is the largest decline for the S&P 500 & the NASDAQ since March. At 2.9% this is the largest downtick for the Dow Jones since January 2015.
Biogen Inc., in its recent quarterly financials lowered its revenue forecast by more than 50% which caused its stock to fall by 22% to just $ 300.03. Apart from this, economic statistics from China & certain European countries were poorer than expected and this heightened the concerns regarding global growth. This caused a number of materials and energy stocks to move downwards as well. Oil prices have also moved to their lowest ever levels in the last 4 months. But Amazon Inc. did quite well for itself on Friday rising by 10% to $ 530.50. This was on the back of higher profits & market capitalization than expected from the company in the last quarter.
The sales of stocks climbed on Friday when news emerged that Democratic presidential hopeful Hillary Clinton might double the US capital gains tax rate on short-term investments when elected.
However, some 7.3 billion shares changed hands on US exchanges, above the daily average of 6.6 billion so far this month.
Analysts cited global issues as the major reason for the sluggish performance of Wall Street in the recent week. As per the chief market strategist of Wunderlich Securities, Arthur Hogan, it was an underwhelming growth of revenue as well as the rising concern of a global economic slowdown which caused the sluggish performance.
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