The Globe and Mail reports in its Friday edition that Wall Street suffered its worst day since June on Thursday, as investors dumped high-flying technology stocks on concern about their astronomical valuations on a day fresh U.S. economic data signalled a long and difficult recovery.
The Globe's Darcy Keith writes that Nasdaq led the drop, with the biggest drags from companies including Facebook, Apple, Amazon, Microsoft and Google parent Alphabet.
The five stocks, deemed strong bets because of solid cash positions and continued growth despite the COVID-19 crisis, also account for roughly a quarter of the S&P 500's market value and have driven the stock market's narrow technology-led recovery from the pandemic lows hit in March.
While losses were tamer in Toronto, some of the Canadian market's best performers this year were also hit with a bout of profit-taking.
Shopify, Canada's tech darling, fell 5.1 per cent, while Ballard Power fell 10 per cent. Many market observers suggested the pullback in stock prices, especially for the U.S. tech giants, was overdue. "The prevalent attitude in the market now is that this is a healthy correction," said Mike Zigmont at Harvest Volatility Management in New York.
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