(New York) The New York Stock Exchange closed lower on Friday, after a rotation of portfolios to the detriment of technology, amplified by the giant computer failure that sowed chaos within multiple companies around the world.
The Dow Jones index fell 0.93% to 40,287.53 points, the technology-dominated NASDAQ lost 0.81% to 17,726.94 points and the S&P 500, which is ending its worst week since April, fell 0.71% to 5,505.00 points.
An unprecedented computer outage rocked part of the global economy on Friday due to a faulty update on Microsoft’s Windows operating systems and antivirus software from the American cybersecurity group CrowdStrike.
Grounded planes, chaos at airports, hospital closures, disrupted urban transport in Europe: the computer bug responsible for this crisis has been identified and corrected, CrowdStrike indicated, but many companies were still handicapped on Friday evening.
Shares of US company CrowdStrike, which plunged almost 20% in pre-market trading, ended down 11.10% at $304.96.
Microsoft, one of the world’s largest stock market capitalizations, which had lost 1.3% earlier, finally fell by 0.74%.
The outage has severely affected the airline industry worldwide. Shares of major US airlines, which were in the red for much of the session, have finally recovered, including Delta (+1.18%) and United (+0.13%). Some 2,400 flights have been cancelled in the United States so far.
“This breakdown was a big factor” in the decline this session, commented Tom Cahill, of Ventura Wealth Management, interviewed by AFP.
“It’s been a tumultuous week” as investment rotations out of big-cap technology stocks sent the NASDAQ down some 4% for the week.
According to Tom Cahill, the outage “certainly reinforced that rotation,” which benefited the Russell 2000, the index of small and mid-cap stocks, which gained 1.7% weekly.
Investors also reacted to the results of Netflix, whose shares were shunned (-1.51%) even though the quarterly figures of the leader in streaming were better than expected.
Netflix beat Wall Street expectations with $9.56 billion in revenue, including $2.15 billion in net income. The California-based company also added 8 million subscribers in the second quarter to 277 million. But its forecast for future sales fell short of expectations.
American Express fell 2.74% as its quarterly revenue disappointed, coming in at $16.33 billion, less than analysts expected.
Starbucks soared 6.85% after substantial stake acquisition, according to the Wall Street Journalfrom activist shareholder Elliott Investment Management in the coffee chain, whose mobile application for ordering drinks was also disrupted by the computer outage linked to CrowdStrike and Microsoft.
Prepaid payment company Green Dot fell 5.70% to $9.26 after being fined $44 million by the Federal Reserve for deceptive practices.
While ten-year bond rates rose to 4.23% instead of 4.20%, the market remained nervous and attentive to the twists and turns of the presidential campaign in the United States.
Tom Cahill highlighted “the ambient concern about the results of the election […] in a market that has been ready for a correction for a long time.”
Donald Trump was formally nominated as the Republican nominee for the election at the party’s convention on Thursday night, as uncertainty surrounds the fate of Democratic President Joe Biden’s candidacy.