The stocks we used to refer to as high-fliers spent most of Friday getting shot down. In the first few minutes of trading, the Dow and the S&P edged into record territory, but then the market turned lower with a vengeance. The Nasdaq took the biggest hit, sliding 2.5 percent, one of its worst days in the past two years.
The Dow Jones industrial average (^DJI) fell 159 points, the Nasdaq composite (^IXIC) tumbled 110 and the Standard & Poor's 500 index (^GPSC) lost 23 points.
Many of the technology and biotech stocks that led the Nasdaq to big gains over the past two years were among those leading the decline.
Facebook (FB) fell 4 percent. It's now lost 17 percent in the past month. %VIRTUAL-article-sponsoredlinks%Google (GOOG) and Netflix (NFLX) also lost more than 4 percent on the day. And Amazon (AMZN) dropped 3 percent. Over the past three months, it's down 18 percent.
The online travel companies Priceline (PCLN), Expedia (EXPE) and TripAdvisor (TRIP) had a rough day. And the Internet retailer Zulily (ZU) dropped 9 percent.
All of these stocks are referred to as momentum plays. On the way up, their big gains brought in more buyers. But now that momentum is working in reverse.
And it's not just new tech that's under fire. Microsoft (MSFT) fell 2.5 percent, while Cisco Systems (CSCO) and Adobe (ADBE) lost more than 1 percent.
Chipmaker Micron Technology (MU) dropped 6 percent, even though its quarterly results beat expectations.
As for the biotechs, the iShares ETF (IBB) tumbled 4 percent. The list of losers is long, including Celgene (CELG) and Biogen (BIIB) fell down 4 percent; Jazz Pharmaceuticals (JAZZ) and Illumina (ILMN) lost 7 percent each.
And Halozyme Therapeutics (HALO) plunged 27 percent after the company halted enrollment in its study of a drug to treat pancreatic cancer.
Elsewhere, E-Trade (ETFC) slid another 8 percent. With all of the hullabaloo over high frequency trading this week, there's concern about new regulations that could cut into the firm's trading volume.
The big winners of the day were a trio of initial public offerings. The food delivery firm GrubHub (GRUB) jumped 34 percent from its IPO price. Energy software company Opower (OPWR) rose 21 percent. And IMS Health (IMS) rose 17 percent from its initial pricing.
What to Watch Monday:
The Federal Reserve releases consumer credit data for February at 3 p.m. Eastern time.
-Produced by Drew Trachtenberg.
7 Tax Tips for Investors
After Market: High Tech Dives Lower, Drags Everyone Down
The 1099 forms you received from brokerages and other financial institutions might not be the last ones they send. It's common for them to issue corrected versions a little later. Consider getting your tax return ready to go, then waiting until close to April 15 before submitting it. That way, you can incorporate any last-minute changes and avoid having to file an amended return.
Pay attention to when you sell any holding, because the capital gains tax rates differ for long-term and short-term holdings. Short-term capital gains are taxed at your ordinary income tax rate, which could top 30 percent. Long-term gains (those held for more than a year) get preferential rates, which are zero percent for those in low-income brackets and 15 percent for most of us.
If you own underwater stocks, consider selling them for a loss. You can use those losses to offset gains from other sales, reducing your taxes owed. You can always buy back the asset later, if you still believe in it -- just be sure to wait for 31 days to pass, to observe the "wash sale rule."
If you're planning to sell one or more holdings that will give you a really big gain, submit an amended W-4 form to increase your withholding, or send the IRS an estimated tax payment. Underpaying your taxes significantly during the year can lead to a penalty at tax time. You may be protected by a "safe harbor" provision, though, which can save you from having to jump through those hoops.
If you're planning to buy shares of a mutual fund, determine when it will distribute its dividends. Many funds do so near the end of the year, and when that happens, the fund's share price will drop by the amount of the distribution -- which is taxable to shareholders. It's better to just wait until after that payout to buy in.
Mutual funds with high turnover ratios (reflecting a lot of buying and selling in a fund) have expenses for these trades. It's worth favoring funds with low turnover ratios, especially index funds and index-tracking ETFs, which simply hold onto the mix of securities in a given index, without a lot of trading activity. (Index funds generally outperform their higher-turnover counterparts, too.)
Boost the power of your Individual Retirement Accounts by making your annual contributions early in the year, giving the funds more time to grow. Over decades, it can make a significant difference.