Market week: Stock indexes sink on tech selloff
Nasdaq drops to correction territory
The major North American stock indexes posted a losing week, with the Nasdaq Composite Index dropping into correction territory as investors sold off major technology issues. The index had only just touched a fresh record high at the beginning of September before selling off precipitously, culminating in a 10% correction this week. The Nasdaq posted a 4.1% loss on the week, while the S&P 500 Composite Index retreated 2.5%.
The stock market losses came as a coronavirus relief bill stalled in the U.S. Senate with Democrats blocking the Republican-sponsored legislation. Adding to investor qualms was budget data from the U.S. Treasury Department, which saw the deficit surge over $3 trillion in August, with further increases likely before the end of the fiscal year on Sept. 30. However, U.S. inflation did see an increase, climbing to an annual 1.3% in August, from 1.0% in July, suggesting some success in government and central bank measures to stimulate consumer demand following the recessionary environment during the pandemic lockdown.
In Canada, the S&P/TSX Composite Index continued its recent uninspiring performance, remaining flat for another week, as pressure from the technology selloff wafted across the border and a 5.4% weekly decline in the price of crude oil weighed on performance in both information technology and energy sectors.
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