Stock Market News: Tech Giants Lose $270 Billion In Value After Market Plunge

KEY POINTS

Wall Street took sick Thursday on news COVID-19 cases are rising in more than a dozen states following the widespread lockdown easings that began in April
All three major indices lost more than 5%
Hardest hit by the latest rout were tech stocks

Headline-grabbing news of a new wave of COVID-19 cases rampaging through U.S. states ignited a broad selloff at Wall Street Thursday, plunging all three major indices to their lowest points over the past three months.

There are now 2.09 million confirmed COVID-19 cases in the U.S., as well as 116,000 deaths, as of Thursday evening based on Worldometer data.

Thursday saw the Dow Jones Industrial Average, the S&P 500 and the NASDAQ Composite post their biggest one-day losses since mid-March. The Dow plunged 6.9%, losing 1,861.82 points to settle at 25,128.17. The S&P 500 Index shed 5.9% to 3,002.10, while the NASDAQ, which appeared bullet proof since last week, dropped 5.3% to 9,492.73.

Analysts said Thursday’s huge selloff, which was expected but not this soon, puts the major indices on pace for their biggest weekly losses since March 20, when they all plummeted some 12%.

Adding to the panicked mood were gloomy announcements Wednesday by the U.S. Federal Reserve it foresees a 6.5% contraction in U.S. GDP this year and an unemployment rate at a high 9.3% compared to its previous forecast of just 4.1%.

Worst hit by Thursday's rout were the golden boys of last week's surprising rallies -- the tech stocks. Apple Inc., Alphabet Inc., Amazon.com Inc., Facebook Inc. and Microsoft Corporation together lost more than $269 billion in value Thursday.

Shares of Apple plunged 4.8% to $335.90, Alphabet lost 4.3% to sink to $1,401.90, Amazon closed 3.4% lower at $2,557.96, Facebook shed 5.2% to drop to $224.43, while Microsoft tumbled 5.4% to $186.27. The rest of tech suffered, as well. Among the worst hit were Cisco that lost 7.9% and IBM, which fell 9.1%.

Fortune's a fickle lady and it was only on Tuesday when tech stocks zoomed to their highest valuations ever. On Tuesday, Apple, Amazon, Facebook and Microsoft all hit new all-time highs as the NASDAQ surged past 10,000 points temporarily.

This image released by Northwestern Medicine, shows transplant surgeon, Ankit Bharat, at Northwestern Memorial Hospital in Chicago, where surgeons have performed a double-lung transplant on a COVID-19 patient Northwestern Medicine / Laura Brown

Tuesday's tech surge brought the combined market cap of Apple, Amazon, Facebook and Microsoft to about $5 trillion. Apple ended Tuesday with its stock up 3.2% and a market cap of $1.49 trillion; Amazon rose 3.04% to a $1.30 trillion market cap; Facebook improved 3.14% to $680 billion; while Microsoft edged upwards to 0.76% to $1.44 trillion.

Despite Thursday’s sell-off, the S&P 500 and Dow remained more than 37% above the intraday lows on March 23. Most of the gains since then were driven by stocks that stand to return to their former ways with the economy's reopening. These industries include airlines, cruise lines and retailers.

“Some of these stocks may have gotten ahead of their skis,” said JJ Kinahan, chief market strategist at TD Ameritrade. “When you see some of the airlines being priced at the levels they were before this all started when they say they’re going to do 60% of their business just doesn’t make sense.”