For the week, Alphabet Inc shares fell 5.4 percent, while Microsoft Corp shares fell 6.6 percent.
Alphabet Inc. fell on Friday, with the Google parent prolonging a decline that led to its worst weekly performance since the start of the Covid-19 pandemic.
Shares fell 0.5% in their fourth consecutive negative session. For the week, it dropped 5.4%, its biggest weekly drop since March 2020. Microsoft Corp. ended Friday’s session with a gain of less than 0.1%, but dropped by 6.6% over the course of the week.
The weekly trail came amid a rise in U.S. bond yields, which has largely put pressure on high-growth stocks. Yields on the U.S. 10-year treasury climbed to about 1.77% on Friday, the highest since January 2020, after trading as low as 1.4% in December. Higher rates are seen as a headwind for high-growth and relatively expensive stocks as it reduces the present value of future earnings.
Trade on Friday was also affected by the latest employment report, which showed a drop in the unemployment rate and an increase in wages.
Among other names, Apple Inc. Rose 0.1% on Friday, while Amazon.com Inc. Lost 0.4% and Meta Platforms Inc. decreased by 0.2%.
The iShares Expanded Tech Software Sector ETF fell 0.8%. For the week, it has fallen 8.8% in its biggest drop since March 2020. The magnitude of the recent weakness has seen some analysts value in the sector. Goldman Sachs wrote that “the group may be oversold,” given a positive view for demand trends in 2022.
For Microsoft and Alphabet, the rough start comes to 2022 after a year in which both companies fared sharply better. Alphabet has risen 65% over the course of 2021, more than doubling the yield of nearly 27% of the Nasdaq 100 index. Microsoft rose more than 50% last year, its 10th consecutive positive year, as well as its ninth consecutive year with a double-digit advance.
(Market closure updates.)