Nasdaq dropped more than 1% on Monday as the tech-heavy index felt the repercussions of a stock sell-off in that industry ahead of the highly-anticipated initial public offering for Chinese e-commerce giant Alibaba.
Several tech stocks kicked off the week with losses, offsetting some of the big gains so far this year. Facebook (FB) dropped 3.7%, but the social media giant is still up more than 36% on the year. Netflix (NFLX), which is up more than 24% on the year, fell almost 4% on Monday, while TripAdvisor (TRIP) declined more than 4%. Microsoft (MSFT) also dipped on Monday, dropping almost 1% in the wake of its announced $2.5 billion acquisition of the maker of video game Minecraft.
Meanwhile, even Yahoo (YHOO), which is tantalizingly close to cashing in on its 23% stake in Alibaba, fell off by about 0.8% on Monday as the tech industry in general seemed to experience a slight correction in anticipation of the Chinese e-commerce giant’s IPO.
Despite dipping by as many as 58 points at times on Monday – and, ultimately, closing down 48 points – the Nasdaq remains up more than 8% on the year. The tech-laden index had been consistently hitting 14-year highsthroughout August, riding a hot streak that continued through early September when the Nasdaq crossed the 4,600-point mark for the first time since 2000.
The rest of the market saw mixed results to start off the week, as the S&P 500 fell slightly to finish down 0.1% and the Dow Jones Industrial Average gained about 43 points to rise almost 0.3%.
Investors are also likely bailing on some high-flying stocks ahead of this week’s statement from the Federal Open Market Committee, which could offer new guidance regarding the Federal Reserves plans to taper off its quantitative easing program and, eventually, begin raising interest rates.