US STOCKS-Wall Street closes sharply lower on tech selloff

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By Stephen Culp
NEW YORK, July 23 (Reuters) - Wall Street dropped sharply on
Thursday as investors fled market-leading tech shares due to
mixed earnings reports and growing signs of a worsening
coronavirus pandemic, which could exacerbate a deep economic
recession.
The sell-off steepened after a tech watchdog group reported
that Apple Inc AAPL.O faces consumer protection investigations
in multiple states. The bellwether S&P 500 slid more than 1%, snapping a
four-day winning streak with its biggest daily percentage drop
in nearly four weeks. All three major U.S. stock averages lost
ground, with falling momentum stocks Apple, Microsoft Corp
MSFT.O and Amazon.com AMZN.O weighing heaviest.
"There has been a real disparity between growth and value
and the narrowing has begun," said Stephen Massocca, Senior Vice
President at Wedbush Securities in San Francisco. "There was
also a significant delta between large cap and small cap and
we're seeing that narrow as well."
The Russell 2000 .RUT and the S&P Smallcap 600 .SPCY ,
both small cap indexes, outperformed the broader market.
U.S. jobless claims unexpectedly ticked higher to 1.416
million last week, the Labor Department said. The number excludes recipients of Pandemic Unemployment
Assistance, set to expire on July 31.
Congress kept working to pass new stimulus before that
deadline continued, with Senate Republicans announcing they
could present their version of the bill to Democrats as early as
this week. Total U.S. coronavirus cases topped 4 million on Thursday,
with nearly 2,600 new cases every hour, on average, according to
a Reuters tally. "There's so much uncertainty about stimulus, the election,
earnings, the racial landscape and geopolitical tensions," said
Robert Pavlik, chief investment strategist and senior portfolio
manager at SlateStone Wealth LLC in New York. "And underlying
everything is the uncertainty about COVID-19 and the re-opening
process."
Unofficially, the Dow Jones Industrial Average .DJI fell
353.64 points, or 1.31%, to 26,652.2, the S&P 500 .SPX lost
40.37 points, or 1.23%, to 3,235.65 and the Nasdaq Composite
.IXIC dropped 244.71 points, or 2.29%, to 10,461.42.
Second-quarter reporting season is in full-stride, with 113
S&P 500 constituents having reported. Refinitiv data shows that
77% of those have beaten expectations that were extraordinarily
low. Analysts now see aggregate second-quarter S&P earnings
plummeting by 40.8%, year-on-year, per Refinitiv
Microsoft Corp MSFT.O shares fell after reporting its
cloud computing business Azure reported its first-ever quarterly
growth under 50%. Tesla Inc TSLA.O reported a profit for the fourth straight
quarter, setting the company up for inclusion in the S&P 500.
But the stock slid as analysts questioned whether the electric
automaker's stock price matched its performance. American Airlines Group Inc AAL.O jumped after announcing
it would rethink the number of flights to add in August and
September. Also, it reported an adjusted loss per
share of $7.82. Airlines, battered by mandated lockdowns, reversed early
losses, with the S&P 1500 Airlines index .SPCOMAIR ending the
session well into the black.
Twitter Inc TWTR.N advanced after reporting its
highest-ever annual growth of daily users.