After Market: On Flash Crash's Anniversary, Stocks Take a Dip

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Internet and social media stocks lead a broad selloff on Wall Street Tuesday. Coincidentally, it's also the anniversary of one of the scariest days in market history. On May 6, 2010, the Dow plunged nearly 1,000 points in a matter of minutes in what became known as the 'flash crash.'

The damage Tuesday was a lot less severe. The Dow Jones industrial average (^DJI) fell 129 points, the Standard & Poor's 500 index (^GPSC) lost 17, and the Nasdaq composite (^IXIC) slid 57 points.

Twitter (TWTR) has become the poster boy for social media stocks that were hyped up too much. It lost 18 percent Tuesday and has now lost nearly a third of its value in just six months. The stock is trading at its lowest level since the company went public in November. The apparent trigger for Tuesday's decline: Stock restrictions were lifted on many insiders, allowing them to sell their shares for the first time -- and sell they did.

Looking at other social media stocks: Facebook (FB) fell 4 percent and LinkedIn (LNKD) lost 5½ percent. Netflix (NFLX) fell 5 percent and Google (GOOG) declined by 2½ percent.

On the earnings front, the insurance giant AIG (AIG) fell 4 percent as net fell sharply from a year ago.

Martha Stewart Omnimedia (MSO) lost 8 percent. Revenue was weak at its publishing and broadcast operations.

On the upside, Office Depot (ODP) jumped 16 percent. Its net topped expectations and the company announced plans to close 400 underperforming stores. Anadarko Petroleum (APC) rose more than 3 percent. And DirecTV (DTV) gained 2 percent after reporting that its net fell, but still beat expectations.

Elsewhere, Athenahealth (ATHN) tumbed 14 percent after the activist investor David Einhorn said he's shorting the stock. He says it could fall by as much as 80 percent. The stock has lost about a quarter of its value in the past six months.

Merck (MRK) fell 2½ percent on news that it had agreed to sell its consumer health unit -- which includes brands such as Coppertone and Claratin -- to the German firm Bayer for more than $14 billion.

And Target (TGT) lost another 4 percent, one day after its chairman and CEO was forced to resign.

What to Watch Wednesday:
  • The Labor Department releases first-quarter productivity data at 8:30 a.m. Eastern time.
  • The Federal Reserve releases consumer credit data for March at 3 p.m.
These notable companies are scheduled to release quarterly financial statements:
  • Anheuser-Busch Inbev (BUD)
  • AOL (AOL)
  • Avis Budget Group (CAR)
  • Caesars Entertainment (CZR)
  • Dynegy (DYN)
  • FTD Cos. (FTD)
  • Hertz Global Holdings (HTZ)
  • HSBC Holdings (HSBC)
  • Humana (HUM)
  • Kelly Services (KELYA)
  • Keurig Green Mountain (GMCR)
  • Molson Coors Brewing Co. (TAP)
  • Mondelez International (MDLZ)
  • Neenah Paper (NP)
  • Tesla Motors (TSLA)
  • Twenty-First Century Fox (FOXA)
  • Vitamin Shoppe (VSI)
  • Zillow (Z)
-Produced by Drew Trachtenberg.


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9 Comments

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basesport

If our economy is based on a market that reacts to the anniversary of some event, then forget it, pack it up and end the way in which we do business. That is moronic.

May 07 2014 at 7:44 AM Report abuse +1 rate up rate down Reply
Iselin007

Flash crash flash back whatever.

May 06 2014 at 11:22 PM Report abuse +1 rate up rate down Reply
Iselin007

Those fat salaries and government pensions are catching up to the economies low wage part time crap jobs turning revenue into a pipe dream. When they wake up and pinch themselves they realize those manufacturing job losses left them holding the bag.

May 06 2014 at 11:12 PM Report abuse +1 rate up rate down Reply
Iselin007

Maybe when they revise the Labor statistics they'll add these missing 25,000 + people from NJ back into the unemployment counts, it's the right thing to do.

May 06 2014 at 10:41 PM Report abuse rate up rate down Reply
Iselin007

Happy Anniversary! I see nobody wanted to take credit for the article. I see they found some 25,000 + homeless in Alantic City New Jersey, must be part of the not in the labor force which keeps the unemployment rate lower math wise.

May 06 2014 at 10:35 PM Report abuse rate up rate down Reply
fred

More cocaine high free money.....yea, that's the ticket!!!

May 06 2014 at 8:56 PM Report abuse rate up rate down Reply
uh34d

Anybody who wants to know what's been happening, is happening and will continue to happen in the stock market need only read David Stockman's book The Great Deformation. I don't agree with a number of theories presented in the book, but when it comes to the stock market, Stockman nails it. And we can thank the Fed for feeding the maw of scalpers who operate on Wall Street and the free money given to corporations in order to perpetuate the scam.

If you're a small investor, have money in mutual funds, get out now and move to a cash position...you can't win in the scam. The next bubble is just around the corner and it will be more ugly than the last one of 07-08.

May 06 2014 at 8:23 PM Report abuse rate up rate down Reply
1 reply to uh34d's comment
merstockgto

Evidently you have not been smart to invest like I have in the stock market since 1980. The market goes up and it goes down. That is what it does but if you have the intestinal fortitude to hang in there, there are great rewards.

May 06 2014 at 11:07 PM Report abuse rate up rate down Reply
seawarriorteam

Dang it. Foiled again. It's so hard swimming with sharks isn't it ? Stage sells offs to get rich off their short positions. Is it that hard to trace back and find out if that is happening ? No one is that
psychic. Therefore I think human manipulation is involved.

May 06 2014 at 7:32 PM Report abuse rate up rate down Reply
thefacts22

I wonder how long more the USA has,manufacturing gangsters,welfare dependency and social media

May 06 2014 at 7:14 PM Report abuse rate up rate down Reply
1 reply to thefacts22's comment
Iselin007

Losing the manufacturing that once provided 40 hours a week plus overtime is destroying this country. We lose all the add on jobs like machine repair men, and various supply companies. Various shops provide cutting tools, sharping, welding lubricants, x-ray equipment, measuring devices, and more when you have manufacturing.

I have seen electrical supply shops close that once provided the wire, emt, and other supplies needed for the constant up grades and changes in factories.

It's bad because when the railroads tracks and manufacturing places close they get sold off for development and making big industrialzones scarce. You end up with multiple low wage stripmalls and crime.

May 06 2014 at 11:06 PM Report abuse +1 rate up rate down Reply
duey35

corporate profits go down we all get hurt. less jobs, higher prices, less work.
Why can't some people see the reality.

May 06 2014 at 6:25 PM Report abuse rate up rate down Reply
2 replies to duey35's comment
obielies

http://www.youtube.com/watch?v=e_JJLLfTR8I <~~ THESE PEOPLE VOTED FOR A FREE HANDOUT ,N IF YOU VOTED FOR OBAMIT , YOU VOTED FOR YOUR OWN DEMISE.ALSO. !! !!

May 06 2014 at 7:15 PM Report abuse rate up rate down Reply
Iselin007

The corporate money off shore isn't doing much good here.

May 06 2014 at 10:44 PM Report abuse rate up rate down Reply