NEW YORK (AP) — U.S. stocks were down Friday as companies around the world struggled to contain the effects of a disruptive technology failure.
The S&P 500 index was down 0.6% in afternoon trading, a day after a widespread eradication The week of 2018 brought a decline for most of the market, which is on track to close out its worst week in months. The Dow Jones Industrial Average was down 384 points, or 1%, as of 1:57 p.m. ET, and the Nasdaq Composite Index was down 0.8%.
These measures were taken following a major breakdown disturbed flights, banks and even doctor appointments anywhere in the world. Cybersecurity firm CrowdStrike said the issue believed to be causing the outage was not a security incident or cyberattack and that it had deployed a patch. The company said the problem was a faulty update sent to computers running Microsoft Windows.
Crowd strikes The stock fell more than 15% in early trading, but later pared its loss to 12.2%. Microsoft lost 0.9%.
Cybersecurity industry analyst Richard Stiennon called the mistake a historic error on CrowdStrike's part, but he also said he didn't think it was indicative of a larger problem in the cybersecurity industry or in CrowdStrike as a company.
We all know that you can make a typo, make a typo, etc. — we don't yet know the technical details of how that caused the blue screen of death for users, he said.
“The markets will forgive them, the customers will forgive them, and it will all work out.
Shares of other cybersecurity companies rose, with SentinelOne up 8.1% and Palo Alto Networks up 1.7%.
The outage affected check-in procedures at airports around the world, causing long lines of frustrated passengers. It initially helped send U.S. airline stocks tumbling, but they quickly pared their losses. United Airlines, for example, gained 1.6%. It said many travelers could face delays and issued a waiver to make it easier to change travel plans.
American Airlines Group fell 0.8% and Delta Air Lines was unchanged.
Corporate results also moved stock prices, with Comerica falling 10.5%, even though it reported earnings that beat analysts’ expectations in the spring. The bank said it received preliminary notice that it would not continue issuing the Direct Express debit card to about 4.5 million federal benefit recipients, a program it has offered since 2008.
American Express fell 3.3% after its revenue for the latest quarter missed analysts' forecasts, a major reason for the Dow's slide, despite reports higher than expected profit.
Netflix The streaming giant has been swinging between gains and losses after reporting a profit for the last quarter that beat analysts' expectations. It was most recently down 2.1%.
The S&P 500 is on track for its worst week since April, even though it hit a record high on Tuesday. Initially, pressure mounted on the The big tech stocks that were the market's biggest winnersAmidst criticism, they have simply become too expensive. Nvidiafor example, is up nearly 140% for the year so far, amid a surge on Wall Street frenzy around artificial intelligence technologyeven after falling 2.5% on Friday.
Such declines are having a knock-on effect on the S&P 500 because the index puts more weight on larger stocks, and big tech companies are by far the largest on Wall Street. Gains in some previously unpopular areas of the market, including smaller stocks and companies whose profits are closely tied to the strength of the economy, have helped offset some of those declines.
This rotation may continue, but it doesn't always have to be that yields are rising faster; it could be because they're falling less, according to Brian Jacobsen, chief economist at Annex Wealth Management.
Wall Street suffered a rout on Thursday that dragged most stocks down, including struggling small companies and so-called value stocks.
The Russell 2000 index of small caps was on track for a third straight decline on Friday, after slipping 0.5%. That follows a whopping five days in which it climbed 11.5%.
Along with the rise in big tech stocks, hopes for a better future lower interest rates The Federal Reserve's stimulus measures also boosted the U.S. stock market and pushed down Treasury yields.
Yields edged higher in the bond market on Friday. The yield on the 10-year Treasury note rose to 4.23% from 4.20% late Thursday.
In foreign markets, indices were mostly down in Europe and Asia.
Stocks fell 2% in Hong Kong and rose 0.2% in Shanghai after Chinese officials briefed reporters in Beijing on the outcome of a high-level meeting of the Communist Party in power. They provided few details of the ambitious plan they endorsed to make China a technology leader, develop its financial markets and raise living standards.
AP reporters Matt Ott, Elaine Kurtenbach and Alan Suderman contributed to this report.
