Apple downgrade sparks tech sell-off, sending Alphabet and Microsoft to one-year lows

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  • Google parent Alphabet and Microsoft both hit 52-week lows on Thursday.
  • The Nasdaq Composite is again in a falling pattern after two weeks of the index’s worst since the start of the pandemic.

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Shares of large technology companies took heavy losses on Thursday after Bank of America analysts downgraded Apple’s stock rating, pulling down several other US stocks along with them.

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Tech stocks have been pushed down throughout the year as investors lock out growth and flock to more defensive assets to tackle higher interest rates and get ahead of a potential downturn.

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The tech-heavy Nasdaq Composite rose on Tuesday and Wednesday, but was buying after two weeks of its worst since the start of the Covid pandemic. Now the declining trend is back, with the Nasdaq down 2.8% on Thursday – its biggest one-day jolt since Sept. 13. The broader S&P 500 fell 2.1%.

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Apple shares fell nearly 5% as Bank of America analysts led by Vamsi Mohan changed its rating from buy to neutral, deviating from the buy position held by most analysts surveyed by FactSet.

Analysts pointed to a number of risks, including a weak buying cycle associated with the iPhone 14 that Apple released this month. A day earlier, a report said that Apple had scrapped its plan to increase iPhone production to 6 million units in the second half of the year.

Apple stock is now down 20% as of the end of 2021, while the Nasdaq is down 31% over the same period.

Among the technology companies with the largest market valuations, Microsoft suffered the mildest blow. It ended Thursday’s trading session down about 1.5%, which was still a 52-week low. Google parent Alphabet also fell 2.6% to a 52-week low. Shares of Facebook parent meta platforms fell by 3.7%, Amazon by 2.7% and Tesla down 6.8%.

Small growth-oriented tech companies, along with Coinbase, also suffered after Wells Fargo began coverage with an underweight rating. Elsewhere, Shopify fell 8.45%, Rivian fell 7.9% and Roblox fell 7%.

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Credit: www.cnbc.com /

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