CrowdStrike Shares in Slide After Outage

Wall Street posts worst week since April
By Newser Editors and Wire Services
Posted Jul 19, 2024 3:35 PM CDT
CrowdStrike Shares in Slide After Outage
Screens show a blue error message at a departure floor of LaGuardia Airport in New York on Friday after a faulty CrowdStrike update caused a major internet outage for computers running Microsoft Windows.   (AP Photo/Yuki Iwamura)

US stocks closed lower Friday, extending a slump that left Wall Street with its worst week since April. The losses came as businesses around the world scrambled to contain the effects of a disruptive technology outage. Cybersecurity firm CrowdStrike sank after saying the issue believed to be behind the global outage affecting flights, banks, and medical offices lay in a faulty update it sent to computers running Microsoft Windows, per the AP.

  • The Dow fell 377.49 points, or 0.9% to 40,287.53.
  • The S&P 500 fell 39.59 points, or 0.7%, to 5,505.
  • The Nasdaq fell 144.28 points, or 0.8%, to 17,726.94, dropping 671.51 points, or 3.6%, for the week.

It was only Tuesday that the S&P 500 set its latest all-time high. At first, pressure built on the Big Tech stocks that have been the market's biggest winners, after criticism they simply grew too expensive. Nvidia, for example, is still up 138% this year amid a frenzy around artificial-intelligence technology, even after falling 2.6% Friday and 8.8% over the week.
Gains for previously unloved areas of the market had helped to offset some of those declines: smaller stocks and companies whose profits are closely tied to the economy's strength were rising. That sparked hopes for a market where more stocks are rising, rather than just a handful of dominating elites, which market watchers say would be healthier.

"This rotation can continue, but it doesn't always have to be where they're rising faster, it could be because they are falling less," said Brian Jacobsen, chief economist at Annex Wealth Management. CrowdStrike's stock dropped 11.1% on Friday, while Microsoft's lost 0.8%. Richard Stiennon, a cybersecurity industry analyst, called it a historic mistake by CrowdStrike, but he doesn't think it revealed a bigger problem with the cybersecurity industry or with the company. "The markets are going to forgive them, the customers are going to forgive them, and this will blow over," Stiennon said. Stocks of rival cybersecurity firms climbed, including a 7.8% jump for SentinelOne and a 2.2% rise for Palo Alto Networks. (More stock market stories.)

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