By Rex Crum and Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Tech stocks took a broad beating
Tuesday, with Facebook Inc., Yahoo Inc. and Netflix Inc. among the
decliners as investors targeted some of the tech sector's best
performing stocks of the year in a hard, market-wide selloff.
The selloff deepened as the day progressed, and by the time the
market closed, the Dow had fallen by almost 160 points and the
S&P 500 gave up 1.2%. But tech stocks -- which have
outperformed the broader market this year -- were hit harder. The
tech-heavy Nasdaq Composite Index (RIXF) gave up 75 points, or 2%,
to close at 3,694, while the Morgan Stanley High-Tech Index (MSH)
fell almost 2% and the Philadelphia Semiconductor Index (SOX) gave
up 1.7%.
The broad selloff was pegged to the continued effect of the
federal government shutdown, which has entered its second week with
no resolution in site. Robert Pavlik, chief market strategist at
Banyan Partners, told MarketWatch that the effect of the shutdown
was having a "particularly negative effect on so-called 'momentum'
stocks like Facebook Inc., Priceline.com Inc., and Tesla Motors
Inc."
Among notable tech stocks, Facebook (FB) shares fell by 6.7% to
$47.14, while Netflix (NFLX) gave up 5% to close at $302.32, Yahoo
(YHOO) was down 3.5% to end the day at $32.93 and Priceline.com
Inc. (PCLN) fell 4% to close at $998.13.
Those four have been among the strongest performers in the tech
sector this year; Netflix shares were up nearly 225% from the first
of the year, while Facebook is up more than 77% and Yahoo has
surged by 62%. Priceline shares have gained more than 60% for the
year-to-date.
Hewlett-Packard Co. (HPQ) fell almost 1% to close at $20.75 a
share, a day ahead of the company's annual meeting with Wall Street
financial analysts.
Social-networking stocks were among those having a rough day,
with LinkedIn Corp. (LNKD) off by 6% at $222.73; Angie's List Inc.
(ANGI) down 2.4%, to close at $15.69 and Yelp Inc. (YELP) falling
7.6% to end the day at $64.60.
There was some speculation that continuing stock-market losses
may provide an impetus for U.S. lawmakers to reach some compromise
with President Barack Obama over the federal government shutdown
and budget crisis.
Among other tech stocks, Seagate Technology (STX) shed 37 cents
a share to close at $44.79. The hard-disk drive maker said it
purchased 32.7 million shares of its stock from Samsung Electronics
Co. Samsung had received 45 million shares of Seagate stock when
Seagate bought Samsung's hard-disk drive division in 2011. Samsung
still owns about 12.5 million shares of Seagate stock.
Apple (AAPL) fell almost $7 a share to $480.94 following reports
that the company will expand its iTunes Radio service to the United
Kingdom and Canada by early 2014. Pandora Media Inc. (P), which is
considered the leading Internet radio company, yet doesn't have
service agreements in the U.K. or Canada, fell almost 8% to close
at $24.26 a share.
Amazon.com Inc. (AMZN) shed 2.2% to fall to $303.23 and IBM
Corp. (IBM) ended the day down by 1.8%, at $178.72. A U.S. federal
court ruled in favor of Amazon in a case involving a cloud
computing contract with the Central Intelligence Agency. IBM wanted
the government to reopen the $600 million contract, which the CIA
had awarded to Amazon.
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