Market sell-off slams tech stocks
Friday's Standard & Poor's downgrade of the United States' crediting rating from coveted AAA to AA+ has set off a trading tsunami that is washing over tech stocks. Apple, Google and Microsoft are among the heavy-hitters taking a hit in early trading -- the first day since the shocking announcement.
"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics", S&P says in the Friday statement. "More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011".
Chilling: "We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case".
The sell off started in international markets before the opening bell today. The Dow fell 250 points, recovered, then dropped by more than 370 points before pulling up again.
Here's how some prominent tech companies are fairing:
Apple. Down 3 percent to 4 percent. Apple opened at $361.38, off Friday's close of $373.62. Late-morning trading: $363.55. Market cap: $337.04 billion.
Cisco. Down 4 percent to 5 percent. Cisco opened at $14.40, off Friday's close of $14.94. Late-morning trading: $14.47. Market cap: $79.56 billion.
Google. Down 3 percent to 4 percent. Google opened at $562.19, off Friday's close of $579.04. Late-morning trading: $564.28. Market cap: $182.20 billion.
IBM. Down nearly 2 percent. IBM opened at $168.83, off Friday's close of $172.23. Late-morning trading: $170.29. Market cap: $203.37 billion.
Intel. Down about 2 percent to 3 percent. Intel opened at $20.23, off Friday's close of $20.79. Late-morning trading: $20.65. Market cap: $109.30 billion
Microsoft. Down 2 to 3 percent. Microsoft opened at $25.03, off Friday's close of $25.68. Late-morning trading: $25.13. Market cap: $210.51 billion.
Oracle. Down 3 percent to 4 percent. Oracle opened at $27.43, off Friday's close of $28.35. Late-morning trading: $26.92. Market cap: $136.36 billion.
Yahoo. Down about 2 percent. Yahoo opened at $11.42, off Friday's close of $11.74. Late-morning trading: $11.67. Market cap: $15.27 billion.
Share prices recorded between 11:41 a.m. and 11:46 a.m. EDT. I'll put the day in perspective after the market closes.