Stock markets in New York and Toronto sold off on Thursday, let by shares in technology companies that have been on a tear since the coronavirus pandemic began.
The technology-focused Nasdaq was down 590.36 points, or more than four per cent, to hit 11,466.08 near midday. The Nasdaq has been on a tear for months as investors pour money into technology companies like Netflix, Amazon, Zoom and Google, which have been posting strong earnings as millions of people have had to work from home and be at home more than normal for months.
“Some of the stocks have gotten a little pricey, and what the actual cause is to spark this sell-off is difficult to say,” said Randy Frederick, vice-president of trading and derivatives for Charles Schwab in Austin, Texas.
“The leading sector for quite a long time has been the Nasdaq, which is very heavily weighted in technology stocks, so people just saw this as an opportunity to take the profits off the table.”
Thursday is shaping up to be the worst day for the Nasdaq since June. It’s also the worst day for the so-called FAANG stocks — Facebook, Amazon, Apple, Netflix and Google — since March.
But technology stocks weren’t the only ones selling off. The Dow Jones Industrial Average group of 30 big companies and the broader S&P 500 were both down by about three per cent. Losses were slightly lower in Toronto, where the benchmark S&P/TSX Composite Index was off by about one per cent.
Shopify, which became the most valuable company in Canada in this pandemic, lost about six per cent of its value to trade at just over $1,300 a share. Shopify’s TSX listed shares tripled between the start of April and Wednesday.
Shares in TSX-listed payment processing firm Lightspeed also lost about six per cent to trade at just over $44 a share. Since bottoming out at $12 a share in March, shares in Lightspeed have almost quadrupled.
The loonie lost about half a cent to change hands at 76.02 cents US compared with 76.53 cents US on Wednesday.