Nasdaq drops more than 1% as Intel and Twitter lead tech rout
The Nasdaq Composite dropped 1.46 percent, its biggest drop since June 27, when it fell 1.54 percent. The S&P 500 fell 0.7 percent with tech dropping 2 percent. The Dow Jones Industrial Average declined 75 points/
Tech stocks posted their second straight day of steep losses. On Thursday, the sector dropped more than 1.5 percent as Facebook posted its worst day ever. Shares of Intel and Twitter led the charge lower on Friday, falling after the release of their latest quarterly results.
The decline comes after the Commerce Department said the U.S. economy grew last quarter at its fastest rate since the third quarter of 2014.
"When growth companies, particularly tech companies, are priced to perfection, the price for imperfection is quite high," said Michael Arone, chief investment strategist at State Street Global Advisors. "Meanwhile, the reward for beating on earnings is much lower than usual."
"It's a consequence of where we are in the bull market," Arone said.
Intel dropped more than 8.5 percent after announcing delays on its next generation chips. The company did report better-than-expected earnings, however. Twitter, which reported earnings that matched expectations, dropped more than 20 percent after it said its number of monthly active users fell.
Thus far, over 50 percent of S&P 500 companies have reported earnings. Of those companies, 79.8 percent have reported better-than-expected earnings, according to data from FactSet.
The Commerce Department said the U.S. economy grew by 4.1 percent in the second quarter, in line with analyst expectations. In recent days, White House officials have been indicating the reading will be strong. "You're going to get a very good economic growth number tomorrow. Big," White House economic advisor Larry Kudlow said ahead of the release.
"While we may be late in the game when it comes to our economic expansion, we're likely not in the last inning, and I think we see that in today's numbers," said Mike Loewengart, vice president of investment strategy at E-Trade. "Sure the trade war has begun to take its toll, but our economic fundamentals continue to be solid."
President Donald Trump touted the strong number on Friday, saying in a tweet the figure was "GREAT." Trump later said in a news conference that "we're going to go a lot higher" than 4.1 percent GDP growth.
The market's initial reaction to the data was muted, however, with stock futures briefly paring gains.
"The number at 4.1 percent is strong, but the whisper number was higher than that," said Jeff Zipper, managing director of investments at U.S. Bank Private Wealth Management. "I think that's why you got the non-reaction in the market to it."
—CNBC's Jeff Cox contributed to this report.