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Big decline for tech stocks as U.S. Senate approves debt-ceiling deal amid broader economic concerns

Tuesday, August 2, 2011 · 5:14 pm · 44 Comments

“It proved to be a bad day for tech stocks on Tuesday, with big declines from wireless carrier MetroPCS Communications Inc. highlighting a session that included the U.S. Senate approving the debt-ceiling deal,” Rex Crum reports for MarketWatch.

“Also, a decline in consumer spending in June, as well as more worries about the overall state of the U.S. economy, set investors selling. The Dow Jones Industrial Average gave up almost 266 points, or 2.2%, to close at 11,866 and put in an eighth-straight day of losses,” Crum reports. “The Nasdaq Composite Index recorded an even greater percentage loss than the Dow, falling more than 75 points, or 2.8%, to close at 2,669. The Philadelphia Semiconductor Index shed 3% and the Morgan Stanley High Tech 35 Index gave up 2.5% on the day.”

Crum reports, “Not even passage of the critical debt-ceiling legislation was enough to get investors behind the market…Other tech stocks on the decline included Apple Inc., which gave up almost 2%, Google Inc., down by 2.4%, Amazon.com Inc., which fell 4.4%, Intel Corp., down by 2.3% and Hewlett-Packard Co., which ended the day with a loss of 2.4%.”

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Comment Feed

44 Comments

Amateur investor

Tuesday, August 2, 2011 - 5:27 pm · Reply

I smell a buying opportunity.
Almux

Tuesday, August 2, 2011 - 5:40 pm · Reply

Yes, Amateur investor, buy… but buy real stuff! No shares will survive if money doesn’t.
- Engineer
  
  Wednesday, August 3, 2011 - 5:31 am · Reply
  
  As the value of the dollar declines the stock market will go up–since the shares, which represent ownership in a real entity, will be priced in smaller and smaller dollars.
8^þ

Tuesday, August 2, 2011 - 5:46 pm · Reply

Cue the wing nut idiots with their rants. They’ve just become tiresome and pathetic.
- Engineer
  
  Wednesday, August 3, 2011 - 5:32 am · Reply
  
  …rants the ignorant left winger who knows nothing about economics.
  - Dick Morris
    
    Wednesday, August 3, 2011 - 9:39 am · Reply
    
    Obama will lose in a landslide:
    - rhetoric.assassin
      
      Wednesday, August 3, 2011 - 11:28 am · Reply
      
      the fact you REFERENCED the prostitute toe sucker for your point you are are completely clueless
castelbuono

Tuesday, August 2, 2011 - 5:47 pm · Reply

History repeating itself. When will voters ever learn? Electing individuals who serve self-interest, or carry ideological torches do not help the Country. Too bad there’s not a “erase and clean install button” for the existing Government and Congress.
- Aaron M.
  
  Tuesday, August 2, 2011 - 5:52 pm · Reply
  
  All that does nothing if their laws aren’t also removed from the books. Can we just rewind history?
  - Engineer
    
    Wednesday, August 3, 2011 - 5:34 am · Reply
    
    I’d support a constitutional amendment that would require, for every page written in new legislation that 3 pages of existing legislation be removed and 30 pages of regulation be removed.
    
    Then the law would get smaller and smaller.
    
    Also, would like a limit on the total pages of legislation they can pass per unit time.
    
    They are piling laws on top of laws until everyone in the country is a felon– and ignorance of the law is no excuse!
- duh-vinchi
  
  Tuesday, August 2, 2011 - 5:59 pm · Reply
  
  Government and Congress? Right.
  
  Anyway – It’s a nice thought, but what are the chances of actually replacing any significant percentage of self serving ideologues with truly trustworthy individuals?
  
  I actually have very little trust or respect for anyone who gets into government and does nothing but talk about how “government is the problem.” Spend less time arguing about “the government” and more time actually representing the interests of the citizens. Do the jobs you were elected to do. We are supposed to have “Government OF, BY and FOR the PEOPLE.” The government is supposed to represent our interests and needs as a group. As such, it is not inherently a bad thing.
  
  The problem is that it has been corrupted by corporate interests. Corporations are not/should not be considered citizens.
  - MizuInOz
    
    Tuesday, August 2, 2011 - 7:20 pm · Reply
    
    Politics: A strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage.
    Ambrose Bierce
    
    I think that says it…
vsp

Tuesday, August 2, 2011 - 6:03 pm · Reply

Obliterate Washington, the sleazy capital of old America and dirty politicians. Make Cupertino the nerve centre of a new America. The new spaceship at Cupertino should serve this purpose well.
First 2010, Then 2012

Tuesday, August 2, 2011 - 6:16 pm · Reply

If the U.S. government can’t even cut 1% per year, we’re all doomed.

Anybody can figure out a way to cut 1% off their own personal budget over a year, unless they’re an elected Democrat.

The Tea Party is the USA’s only real hope.
- Arnold Ziffel
  
  Tuesday, August 2, 2011 - 6:50 pm · Reply
  
  Yeah, right.
- lukeskymac
  
  Tuesday, August 2, 2011 - 7:20 pm · Reply
  
  So the only for a doomed country… is to elect other guys with the same ideas as the ones who doomed it?
  
  Who ironically created two times the spending as the “OMFG STOP SPENDING CITIZEN MONEY” one?
  - First 2010, Then 2012
    
    Tuesday, August 2, 2011 - 7:28 pm · Reply
    
    The Tea Party didn’t doom anything.
    
    They just got there.
    
    And, with only the House in hand so far (and in the face of entrenched RINOs), they have already changed the discussion from “how much pork can we pass” to “how can we get our drunken-sailor-spending under control?”
    
    We haven’t had a true conservative in the White House since Ronald Reagan and the last time true conservatives had control of congress, we had actual budget surpluses that Clinton had to sign in order to get re-elected.
    
    Like I said, the Tea Party is the USA’s only real hope.
    - Melonsoda
      
      Tuesday, August 2, 2011 - 9:05 pm · Reply
      
      To be honest, that tea party looks quite likeable to me, not so much the Obama=Hitler=socialist (?!) people in it, but politicians like Ron Paul.
      However, living not in the US and not being affected by the politics there, gives me maybe one a bit more objective view about it; to be honest, those tea party politicians look to me like typical politicians, they just try to get votes to get elected into office to make a living out of it. They just have a different catch phrase but are still as phoney as the other guys – and incompetent.
      While I find it good that you are obviously enthusiastic about a political movement, I hope you won’t be frustrated when/if it plays out the way it usually does. Some of your comments here seem to be quite naive and remind me of the “Yes We Can” comments I read in 2008.
      However, I wish all the best for the US. That country has given the world so much, I hope it will overcome this crisis.
      - Engineer
        
        Wednesday, August 3, 2011 - 5:40 am · Reply
        
        Inside the USA the Tea Party is portrayed completely falsely, I can’t imagine how distorted the portrayal is outside the USA.
        
        Ron Paul has been consistent for decades in his positions and has had every opportunity to compromise and hasn’t.
        
        I can’t say these freshman congressman in the TEA Party are made from the same stuff….
        
        but there is a huge difference between them and the Obama supporters in 2008.
        
        In 2008 obama was advocating tax and spend, and contradicting himself everywhere he went, but the obama supporters were blinded by the fact that he is black (yep, they’re racists.)
        
        The Tea Party people have been consistent for the most part on their one issue.
        
        TEA stands for TAXED ENOUGH ALREADY. They don’t need to be consistent on other issues (though I wish they would stick to their libertarian roots on other issues.) … they just need to be consistent on taxation, to be successful.
        
        Their opponents aren’t even pretending to be fiscally responsible.
        
        Just look at the number of people going around saying we need to raise taxes… they don’t care that taxes are just the enabling drug of the spending binge, they just want to raise them because they want to punish the “rich” because they blame the “rich” for all the failures in their own lives.
        
        ApplePi
        
        Wednesday, August 3, 2011 - 10:55 am · Reply
        
        Usually… things are portrayed more accurately from outside the USA. This is true of anything. US Media is not usually relied on.
      - Gil
        
        Wednesday, August 3, 2011 - 8:10 am · Reply
        
        Yes and liberal scum bags are trying to destroy the country that gave the world so much hope. It’s an infiltration of our government of America haters. This has to go deeper than what’s on the surface. Planted people from the old Soviet Union or China. Don’t discount that possibility. It’s so unbelievable what’s going on right now it makes all of us NORMAL americans sick to our stomachs. We’ve been hijacked.
    - Paul I.
      
      Wednesday, August 3, 2011 - 1:36 am · Reply
      
      You should read what Reagan said about holding the budget hostage like the Tea Party idiots just did. Hint: He was against it.
      BTW, this “deal” just ensured a much longer and more painful recession, and will actually make the deficit worse. That’s what happens when ideologues with no actual economic knowledge are allowed to rule.
      I dare you to iCal this comment!
      - Engineer
        
        Wednesday, August 3, 2011 - 5:43 am · Reply
        
        Yeah, cause reagan was a deficit spender. He was PART OF THE PROBLEM.
        
        I love it that idiots such as yourself, who know nothing about economics, are constantly telling other people they are idiots and then making ignorant economic pronouncements that you cannot defend.
        
        This “Deal” didn’t cut spending enough, and has too many loopholes. Raising taxes wouldn’t improve the economy. Cutting spending would.
        
        If you think that spending more money makes you richer, you’re the definition of an idiot.
        
        Try running up credit card debt and see if it “stimulates” your paycheck.
        
        I mean, you have to be pretty stupid to fall for an obviously self serving line like that from politicians… or lacking in moral fiber in the first place.
- JC
  
  Tuesday, August 2, 2011 - 8:11 pm · Reply
  
  I think you’re full of it! And you’re not looking at the facts! The funniest thing is that during the Clinton admin, the government hardly increased the debt ceiling (by comparison to Bush…) and then he comes in (Republican) and thinks it’s a good idea to invade Iraq as well as Afghanistan (Afghanistan was justified, Iraq was a joke from start to finish and it’s still going! The news just doesn’t think it’s noteworthy anymore due to simple people’s microsecond attention span!) not only did he stretch the US army, navy and airforce, he borrowed a shit load to do it, and billions have simply vanished into thin air, with guys getting killed coz they didn’t get and SAPI plates for their body armour!
  
  So mysteriously the debt ceiling keeps increasing despite the economic BOOM that started prior to the Bush administration taking office, (c#*&>s and housewives were betting football!) and then because he was a tool and hired disgusting and dishonest people, they took all regulations apart so that banks and investment companies could make toxic assetts LOOK like AAA investments…
  
  Then the bottom fell out!
  
  And the douchebag helped all the dirty goons get away with daylight robbery! Instead of helping out the average American! Funny how bankers and investment cronies are still collecting record bonuses, despite betting other people’s millions like they were playing in a games arcade!
  
  You’re ignorant! If your guys hadn’t screwed up the economy this wouldn’t have happened in the first place!
  - Yeah...
    
    Tuesday, August 2, 2011 - 9:21 pm · Reply
    
    Not sure if you remember. After Clinton we were in recession because of the tech boom bust. That was round 1 of all these problems. Clinton’s presidency was sheer luck in timing.
    
    As far those banks yes bush just added fuel to the fire that was already burning because of policy passed by Clinton. Just so you know everyone from the taxpayer who took bad loans knowingly to the assholes in washington (both sides) caused the 2008 crash.
    - Engineer
      
      Wednesday, August 3, 2011 - 5:45 am · Reply
      
      You’re right about everything, except that the tech bust was round 48 or so of all these problems.
      
      This is a common cycle that politicians put everyone thru in order to gain more power and profit for themselves….
      
      I think “The Creature from Jekyll Island” is book you might enjoy– written by G. Edward Griffen. It is about the history of the federal reserve going back to 1913 or so, and it includes monetary history going even further back.
      
      There’s a reason fiat money is associated with the boom-bust cycle.
      
      It’s a dry subject but the book is very readable.
- Mike
  
  Tuesday, August 2, 2011 - 8:19 pm · Reply
  
  @ First: As with Tea Partiers, you start off with judgements, then you follow it with opinion. How pleasant of you.
  
  Pragmatists (who tend to be independents) start with facts, which lead them to plans and action.
  
  No “Tea Party” was listed on any 2010 ballot. It doesn’t appear this “party” will appear on the 2012 ballots either. I encourage them get their act together, but it doesn’t seem this so-called Tea Party can agree on anything, even registration as a 3rd national party. So whoever these spineless people are, they’ve not done squat yet, let alone passed a budget.
  
  Moreover, until this new “party” comes in with constructive ideas rather than obstructionist — if not destructive — tactics, then the smart voter will see how little they can really accomplish.
  
  The difference illustrated:
  
  Mainstreamer: Do your homework, plan carefully, and cut with a scalpel.
  Tea Partier: AAAAGGHHH! You all are idiots! Gimme a chain saw! Somebody GET ME A #$%^&* CHAIN SAW. What the hell is wrong with all you people? Get up and get a chain saw, I said! What are you looking at, I DEMAND you deliver me a chain saw THIS INSTANT. This is ALL YOUR FAULT, you know. I KNOW HOW TO FIX EVERYTHING, you know ….
  - Engineer
    
    Wednesday, August 3, 2011 - 5:46 am · Reply
    
    Here’s a constructive idea: Cut spending. Lower taxes. Let the economy recover.
    
    Its only “obstructionist” if you think that destroying the economy is progress being “obstructed” by it.
    
    If you do, you’re evil.
GM

Tuesday, August 2, 2011 - 6:18 pm · Reply

Buying op indeed. Amateur Investor you are thinking right. Don’t worry about the money it will be just fine. Buy low, sell high. It’s pretty simple. Just be patient and be not afraid. Those who no nothing criticize. They probably didn’t buy AAPL at $20 or $30 dollars either. You can’t win if you don’t play. It’s that simple.
ken1w

Tuesday, August 2, 2011 - 7:04 pm · Reply

If the debt limit was NOT raised, the U.S. would not have defaulted on existing debt obligation. The ongoing increase in debt covers the difference between revenue and spending. America does not “run out of money.”

So, if the debt limit had not been NOT raised, the Government makes it clear that financing the existing debt (no default) is the highest priority. Bond holders get paid. All other spending gets prioritized, or everything is cut by a percentage.

I think the financial market would have reacted more positively to that outcome, because it shows a commitment to solve the debt crisis (not just put a band-aid on it).

After the next election, when the debt limit is expected to be reached again, I don’t think there will be another increase. Look how difficult it was this time. No promise of some distant future spending cuts (which are not actually spending cuts but just reductions in planned increases) will be enough. A “balanced budget” will be enforced going forward (with NO balanced budget amendment), even if Congress is not able to produce a working budget. If the limit is X and we can’t exceed X, spending cannot exceed revenue.
- JC
  
  Tuesday, August 2, 2011 - 8:17 pm · Reply
  
  Wow…
  
  Where can I get some of what you’re smoking?!
  
  What about expenditure known as off budget? Read any good macro economics books recently?
  
  You’re thinking that all this is so simple… It’s a gigantic country! With so many complex systems working within it!
  
  It’s nice to say “here’s your budget now don’t go over..” but things aren’t that simple… I wish they were!
  
  P.s. If you have a credit card, do you pay off the balance in full or do you pay off the minimum payment? You’re not taking into account of the multitude of variables that come with running an entire country… It’s not like they get a big pot of money all in one go at the start of the year either..
  
  Too complex to explain here….
  - ken1w
    
    Tuesday, August 2, 2011 - 9:28 pm · Reply
    
    > It’s nice to say “here’s your budget now don’t go over..” but things aren’t that simple… I wish they were!
    
    Ultimately, it is exactly that simple. It’s nice to have the flexibility to exceed revenue when necessary, as long as politicians have the long-term discipline to reverse the excess later. It is very clear that such discipline is nonexistent, particularly in the last decade (and especially in the last two years).
    
    Think about it… The total accumulated debt for the history of the U.S. is now about $14 trillion, and we need more than $2 trillion more, just to make up the difference between actual revenue and actual spending… for the next 18 MONTHS or so? It doesn’t take a “conservative” to see that’s insanity. Yet most politicians act like they just achieved a victory of “compromise.”
    
    Many members of Congress are calling for a balanced budget amendment to the Constitution, but that’s a lengthy process that is likely to fail. In the short term, the same effect is achieved if, as a result of the next election, it becomes very clear that when the debt limit is again reach in 2013, there is NOT going to be another increase. If that happens, spending cannot exceed revenue. The U.S. is not going to default in its existing debt, so all other spending will need to be prioritized, or if Congress cannot decide on a balanced budget, cut by a percentage across the board until spending does not exceed revenue. Goal of balanced budget amendment achieved.
    
    Whether you or I want this to happen or not, the current trend is for this to happen… It ALMOST happened this time.
Handsome Smitty

Tuesday, August 2, 2011 - 7:22 pm · Reply

The rich get richer and the dumb get dumber.

12/12/2012 – America falls as Obama becomes a new Lenin

The end of the world as predicted by many cultures
KenC

Tuesday, August 2, 2011 - 7:30 pm · Reply

A totally artificial crisis. Much ado about nothing.

The bottom line is what is the cost of 10 year Treasury notes? Same as Germany. There’s no debt ceiling crisis. It was artificial. The greater problem is growth, or the lack of it. We ought to be stimulating more, not spending less.
- Engineer
  
  Wednesday, August 3, 2011 - 5:48 am · Reply
  
  I don’t know about germany, but there is no free market in Treasury notes. They are auctioned by the government and the FOMC sets the prices by buying up so much that the interest rates are kept low.
  
  You can’t use bond interest rates as a signal anymore…
  
  It is a manufactured crisis, though.
LLIBSETAG

Tuesday, August 2, 2011 - 9:39 pm · Reply

3 words: Congressional Term Limits!
- Yeah...
  
  Wednesday, August 3, 2011 - 2:30 am · Reply
  
  Amen to that.
Jax44

Tuesday, August 2, 2011 - 10:02 pm · Reply

Read this, old but relevant:

http://www.lewrockwell.com/reese/reese494.html
Mark

Tuesday, August 2, 2011 - 11:21 pm · Reply

The answer to the problem facing this country is rather simple. Require everyone to take a test before they are allowed to vote. Face it. Stupidity is rampant in this country. Take this idiot for example – http://www.youtube.com/watch?v=J7XA2UUpXRk

Now, multiply this brain surgeon by 100 million, and you can see the problem facing this country.
Derek Currie

Tuesday, August 2, 2011 - 11:50 pm · Reply

Blame Apple, of course. Find obscure reasons to PANIC and dump stock from one of the few companies to thrive during the ongoing economic depression. Go DAY TRADERS go. You’re almost as logical as the fracking Tard Party. Or maybe you ARE the fracking Tard Party.
- Mike
  
  Wednesday, August 3, 2011 - 2:24 pm · Reply
  
  Mark, you hit the nail on the head. trondude proves your point.
trondude

Wednesday, August 3, 2011 - 8:38 am · Reply

ROME IS BURNING!!!! THANKS O-DUMBA
kingmel

Wednesday, August 3, 2011 - 9:43 am · Reply

The polarized dogma on this forum is distressing and depressing. In my experience, anyone who insists that there is only one way to solve a problem, only one correct belief, is wrong.

Future hardship is a certainty and shared sacrifice a necessity if we hope to overcome the challenges we face as a country. Nothing is free and solutions to difficult problems are seldom easy. But we can do this if we start looking out for each other in addition to looking out for ourselves.
TowerTone

Wednesday, August 3, 2011 - 8:50 pm · Reply

“In my experience, anyone who insists that there is only one way to solve a problem, only one correct belief, is wrong.”

Ironic that you contradict yourself, but I get the point.
Unless, of course, you agree with one of the sides?

I’ll go you one better: Too much compromise achieves nothing save for reelection campaigns.

This supposed debt reduction deal did NOTHING to reduce real spending or taxing. The only thing it actually achieved was to keep any Congressman who voted against it, who is truly at odds with what it did and didn’t do, from being on the commitee to reduce the deficit.

It didn’t allow Liberals to raise taxes directly (but will indirectly) so that we will not get the full benefit of their ideology, nor did it allow Tea Party Conservatives to go after as much unneeded spending as possible, so this “Grand Compromise” simply negated everything except campaign slogans.