Microsoft and Alphabet are set for Worst Week Since the Start of the Pandemic

Microsoft and Alphabet are set for Worst Week Since the Start of the Pandemic

Bloomberg

Alphabet Inc. fell, with the Google parent extending a drop that has resulted in its worst weekly performance since the start of the Covid-19 pandemic.

Shares fell 0.5% in their fourth straight negative session. For the week, it dropped 5.4%, its biggest weekly decline since March 2020. Microsoft Corp with a gain of less than 0.1%, but it slipped 6.6% over the course of the week.

The weekly rout came amid a spike in US bond yields, which broadly pressured high-growth names. The yield on the US 10-year Treasury climbed to about 1.77%, its highest since January 2020, after trading as low as under 1.4% in December. Higher rates are seen as a headwind for high-growth and relatively expensive stocks as they reduce the present value of future earnings.

Trading was also impacted by the latest jobs report, which showed a drop in the unemployment rate and an increase in wages.

Among other names, Apple Inc. rose 0.1%, while Amazon.com Inc. lost 0.4% and Meta Platforms Inc. slid 0.2%.

The iShares Expanded Tech-Software Sector ETF fell 0.8%. For the week, it fell 8.8% in its biggest drop since March 2020. The scale of the recent weakness has some analysts seeing value in the sector. Goldman Sachs wrote that “the group may be oversold,” given a positive view for demand trends in 2022.