Tech Wrecks U.S. Stock Market Again Today

After a week when plunging prices for chip makers made it hard for the U.S. indexes to make much headway, even after earnings beats from companies such as Netflix (NFLX), today the software and advertising technology stocks joined in the rout. That sent the Standard & Poor’s 500 down 0.85% to 2668. The Dow Jones Industrial Average retreated 0.82%. And the NASDAQ Composite fell 1.27%.

Apple (AAPL) continued its role as heavy for the week falling another 4.1%. Taiwan Semiconductor Manufacturing (TSM), which started the plunge by announcing a $1 billion reduction in its revenue guidance for the current quarter, was down 1.44%. Semiconductor manufacturing equipment maker Applied Materials (AMAT) dropped 0.2%. Broadcom (AVGO) declined 2.36%. The key to the fortunes of this part of the technology sector was fear that demand for smart phones was turning stagnant, at best.

The software and advertising stocks in the sector, which had held up relatively well this week after previously experiencing their own bout of selling, joined in the decline today. Amazon (AMZN) was off 1.89% and Netflix (NFLX) dropped 1.48%. Facebook (FB), no one’s candidate for leading technology stocks out of their slump, retreated 1.08%. Microsoft (MSFT) was lower by 1.15% and Adobe Systems (ADBE) slid by 1.05%.

This week has put the Standard & Poor’s 500 index back at a challenging level. Earlier in the month the index had bounced off the 200-day moving average and then rallied briefly above the 50-day moving average on April 16 to hit a high of 2708 on April 17. That promised to see the index break out of its current trading range to the upside.

But the action of the last few days has taken the S&P 500 back below the 50-day moving average at 2686. The index closed today at 2668.

That raises the “interesting” question of whether or not the index will move still lower to again test the 200-day moving average at 2605.