US stocks finished the week with solid gains on Friday, but it was not enough to lift the tech-rich NASDAQ Composite Index into the black for the week.
The NASDAQ, which has underperformed compared with the other two top indices since March, fell 52.03 points (1.26 percent) to close the week at 4,071.87, as the S&P 500 lost 2.66 (0.14 percent) to 1,878,48 and the Dow Jones Industrial Average rose 70.45 (0.43 percent) to 16,583.34.
The week was relatively light in terms of economic indicators, among which were two appearances before congressional panels by US Federal Reserve Chair Janet Yellen, who reiterated a fairly upbeat outlook for the economy, while highlighting the need to keep benchmark interest rates low.
Investors also kept an eye on continuing violence in Ukraine, where separatists are to go ahead with an independence vote today.
Cornerstone Wealth Management chief investment officer Alan Skrainka said the most striking development was the NASDAQ’s drop, as it signals that investors still fear that high-flying tech stocks are overvalued and that “they own the wrong stocks.”
Some of the stocks most closely identified with the tech sector’s surge endured ugly moments this week. Twitter Inc sank nearly 18 percent to an historic low on Tuesday after the expiration of a so-called lockup period, which banned sales by company insiders after its public offering. Twitter finished down 17.9 percent.
Shares of Tesla Motors Inc, another high-flyer, sank after the electric car maker gave a weak outlook on second-quarter deliveries and profits. Tesla ended the week 13.6 percent lower.
Other names to post big drops following disappointing earnings reports included AOL Inc (minus-13.4 percent for the week) and FireEye Inc (minus-33.8 percent).
In other corporate news, US retailer Target Corp said chief executive Gregg Steinhafel was stepping down in the wake of a huge data breach, while Italian auto giant Fiat Chrysler Automobiles NV unveiled a US$7 billion plan to relaunch its Alfa Romeo line.
In deals news, France’s Publicis Groupe and Omnicom Group Inc of the US announced they had abandoned merger talks on what would have formed the world’s largest advertising company.
Less resolved was the status of a potential acquisition by US giant Pfizer Inc of Britain’s AstraZeneca PLC, which has so far rejected three requests for talks. Pfizer CEO Ian Read is to try to quell opposition to the deal at an appearance before a British parliamentary panel on Tuesday.
Next weekalso includes earnings from Wal-Mart Stores Inc and Cisco Systems Inc, and economic reports for housing starts, retail sales and industrial production.
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