Tesla Rout Extends to Fourth Day, Longest Streak Since March
(Bloomberg) -- Tesla Inc. fell as much as 4.2% in early Friday trading, heading for its first four-day losing streak since pandemic fears were at their height in mid-March.
The electric-vehicle maker’s ongoing decline came as U.S. tech stocks fell for a second day, with the Nasdaq 100 Stock Index down as much as 1.6% following Thursday’s 5.2% drop, its biggest since March 16. That erased about $730 billion of value from the high-flying benchmark, which prior to Thursday had gained 78% from its March lows.
The index had previously gained in 11 of 13 sessions, hitting fresh records almost daily. Tesla had added nearly 500% this year through Monday’s close.
Apple Inc. fell 1.5% on Friday, Amazon.com Inc. lost 2.1%, Microsoft Corp. slid 1.5%, Alphabet Inc. was down 1.7%, Facebook Inc. fell 2.6% and Netflix Inc. lost 2.5%.
Wedbush analyst Daniel Ives defended the sector, saying tech stocks could still have another 20% to 25% to run. Any weakness is an opportunity to buy “secular growth stories in cloud, cyber security, and tech stalwart FAANG names,” especially Apple and Microsoft, he said.
While Thursday’s “massive sell off will cause some white knuckles on the Street as fears of a tech bubble and stretched valuations become the talk of the town, we continue to believe the secular growth themes around the tech sector are unprecedented with the Covid backdrop accelerating growth stories by 1-2 years in some cases,” Ives wrote in a note.
Not everyone is as optimistic. Momentum begets momentum, said Phillip Toews, chief executive officer of asset manager Toews Corp. If technology stocks go south “that’s like the beginning of the end for the whole market,” he said.
If the market enters a free-fall, it potentially affects all sectors, Toews -- who manages $1.9 billion in assets -- said by phone.
“Even if it doesn’t make sense, everything can fall together,” he said. “It can turn into a panic.”
©2020 Bloomberg L.P.