By Caroline Valetkevitch
NEW YORK (Reuters) – U.S. stocks fell Friday afternoon, led by weaker technology-related shares following their recent rally, as data showed U.S. consumer sentiment dropped to a six-month low.
Tesla Inc shares slid 2.4% after jumping more than 2% on Thursday, when Elon Musk announced he had found a new chief executive for Twitter.
Musk tweeted Friday he had picked former NBCUniversal advertising chief Linda Yaccarino as Twitter’s new CEO.
The S&P 500 technology sector was down 0.9%, with shares of Apple Inc falling 1.3%. The technology index is still up about 21% so far this year.
“They’ve had an incredible run, so those valuation concerns are starting to manifest themselves,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
Adding to investor worries, May consumer sentiment dropped to its lowest since November as a standoff to raise the federal government’s borrowing cap fanned worries about the economic outlook.
Investors worry that the Federal Reserve’s aggressive interest rates hikes could push the economy into recession.
The Dow Jones Industrial Average fell 172.16 points, or 0.52%, to 33,137.35; the S&P 500 lost 29 points, or 0.70%, at 4,101.62; and the Nasdaq Composite dropped 112.30 points, or 0.91%, to 12,216.21.
The Congressional Budget Office said on Friday the U.S. faces a “significant risk” of defaulting on payment obligations within the first two weeks of June without a debt ceiling increase.
Fed Governor Michelle Bowman said the central bank would probably need to raise rates further if inflation stays high.
Among gainers, First Solar Inc shares jumped after the solar panel maker acquired Sweden’s thin-film solar cell technology firm Evolar AB.
News Corp gained 5.9% after the media conglomerate beat Wall Street estimates for third-quarter profit.
Declining issues outnumbered advancers on the NYSE by a 2.30-to-1 ratio; on Nasdaq, a 2.08-to-1 ratio favored decliners.
The S&P 500 posted 19 new 52-week highs and 15 new lows; the Nasdaq Composite recorded 51 new highs and 201 new lows.
(Additional reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru; Editing by Saumyadeb Chakrabarty, Arun Koyyur, Anil D’Silva and Richard Chang)