Taking Toll of Tech's Tumble

By Michael Wursthorn 

Wall Street has been souring since October on one of the year's most popular trades, sparking a selloff that has erased roughly $575 billion in market value from Facebook Inc., Amazon.com Inc., Apple Inc., Netflix Inc. and Google parent Alphabet Inc. The quintet -- commonly known as the FAANG stocks -- has suffered steep losses as investors rethink their lofty valuations and projected growth in the months ahead. But their combined market cap still totals nearly $3 trillion, giving them considerable heft in the S&P 500 index.

-- Facebook is the worst-performing stock of the FAANG group, shedding 21% so far this year, amid questions over its handling of user data. Losses have been mounting since July, when the social-networking firm warned about slowing growth, putting Facebook on pace for its worst year since going public in 2012.

-- Amazon.com posted its second straight quarter of record profitability last month, but slowing revenue growth spooked investors, sending shares down 20% in October alone.

-- The selloff robbed Apple of its $1 trillion market cap, leaving it dangerously close to entering bear-market territory, marked by a fall of at least 20% from a recent high. The iPhone maker's losses have accelerated since the beginning of the month, when Apple offered investors a tepid revenue forecast for the current quarter.

-- Netflix had been one of the best-performing stocks in the S&P 500 throughout the first half of the year, avoiding some of the volatility that rattled other tech giants in the early spring. But the video-streaming company reported weaker-than-expected subscriber growth in July, kicking off a decline that accelerated in October.

-- Alphabet also has shown signs of slowing growth, stirring further angst among investors over tech's durability during an economic slowdown. The search-engine giant has suffered a bruising period after reporting a surging profit on slowing growth in sales, setting up shares of Alphabet for their weakest year since 2014.

Write to Michael Wursthorn at [e-mail]

(END) Dow Jones Newswires

November 18, 2018 12:14 ET (17:14 GMT)

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