Tesla tanks after being left out of S&P 500 index

Tesla tanks after being left out of S&P 500 index

As of writing, the S&P 500 Index, which touched its lowest level since August 11th at 3,339, was down 2.07% on the day at 3,356.

US stocks plunged on Tuesday as investors continued to rotate out of the tech sector.

All the 11 primary S&P 500 sectors dropped, with technology down 4.59 percent, leading the losses.

The Nasdaq dropped 465.44 points, or 4.1%, to 10,847.69.

Energy shares slumped 3.71% as oil prices fell below $40 a barrel.

Confusing things were the continuing speculation about big option purchases in recent days by Japanese tech investor, Softbank.

Shares of major USA tech giants, or the so-called FAANG group of Facebook, Apple, Amazon, Netflix and Google-parent Alphabet, all closed noticeably lower.

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Tesla plunged 21.06% to suffer its biggest daily percentage drop as the electric-car maker was excluded from a group of companies being added to the S&P 500.

Up to Friday's close, the stock had surged about 400 per cent this year.

JPMorgan Chase & Co fell 3.48%, after a report it was probing employees who were allegedly involved in the misuse of funds intended for COVID-19 relief. Declines started premarket and worsened as General Motors said it would take a $2 billion (Dh7.3bn) equity stake in Nikola and partner with the fledgling truck maker to engineer and manufacture its Badger pickup.

Many investors had expected Tesla's recent stock split and profit - the first time it has had four consecutive quarters in the black - to clear the way for entry, something that would see a rush of index-linked purchases of Tesla shares. The news lifted Nikola shares by 46 per cent while GM rose 8 per cent.

Shortly after the opening bell, the Dow Jones Industrial Average fell 517 points, or 1.84 percent, to 27,616.31.

Declining issues outnumbered advancers for a 7.06-to-1 ratio on the NYSE and a 5.31-to-1 ratio on the Nasdaq.

Volume on US exchanges was 10.48 billion shares, compared with the 9.32 billion average for the full session over the last 20 trading days.

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