Wall Street ends worst week since April with new losses

NEW YORK (AP) — U.S. stocks fell in a fresh deluge Friday as companies around the world struggled to contain the effects of a disruptive technology outage.

The S&P 500 index fell 0.7%, its first week down in three weeks and its worst week since April. The Dow Jones Industrial Average lost 377 points, or 0.9%, while the Nasdaq Composite dropped 0.8%.

It wasn’t until Tuesday that the S&P 500 hit its latest all-time high. Initially, pressure mounted on technology stocks, which had been the market’s biggest gainers, as critics accused them of simply becoming too expensive. Nvidia, for example, is still up 138% this year amid a frenzy over artificial intelligence technology, even after falling 2.6% on Friday and 8.8% for the week.

Gains in previously unpopular parts of the market helped offset some of the declines: Small stocks and companies whose profits are closely tied to the strength of the economy rose. That raised hopes for a market where more stocks are rising, rather than a handful of dominant elites, which market watchers say would be healthier.

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.

Momentum in the market’s hardest-hit sectors may be waning. The Russell 2000 index of small caps fell 0.6% on Friday, its third straight decline, after a blistering five-day rally that saw it climb 11.5%. Three out of four stocks in the S&P 500 also fell.

Friday's measures came as a major outage disrupted flights, banks and even medical appointments around the world. Cybersecurity firm CrowdStrike said the suspected problem 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.

CrowdStrikes shares fell 11.1%, while Microsoft shares lost 0.8%.

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 everything will work out.

Crowdstrikes shares pared some of their losses on the day, but still posted their worst performance since 2022. Shares of rival cybersecurity companies climbed, with SentinelOne up 7.8% and Palo Alto Networks up 2.2%.

The outage disrupted check-in procedures at airports around the world, causing long lines of frustrated passengers. The situation initially helped send U.S. airline stocks down, but they quickly pared their losses. United Airlines gained 3.3%, said many travelers could face delays and issued a waiver to make it easier to change travel plans.

American Airlines Group fell 0.4% and Delta Air Lines rose 1.2%.

Comerica fell 10.5%, one of the biggest losses in the market, even though it posted results 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 2.7% as its latest quarterly revenue fell short of analysts' forecasts, a major reason for the Dow's plunge despite a profit that beat expectations.

Halliburton fell 5.6% after the energy services provider met analysts' expectations for profit in the latest quarter but missed on revenue.

Rival SLB found itself on the winning side of Wall Street after reporting higher-than-expected profit, with its shares rising 1.9%.

Overall, the S&P 500 lost 39.59 points to 5,505.00. The Dow Jones lost 377.49 points, or 0.9%, to 40,287.53, and the Nasdaq lost 144.28 points to 17,726.94.

In the bond market, yields rose slightly. The yield on 10-year Treasury notes rose from 4.20% to 4.23% late Thursday.

On 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 ruling Communist Party. They provided few details of the party's comprehensive action plan to make China a technology leader, develop its financial markets and improve living standards.

AP reporters Matt Ott, Elaine Kurtenbach and Alan Suderman contributed to this report.