ETFs
Salesforce Stock Falls, Taking the Dow Jones and These ETFs With It
Key takeaways
- Salesforce stock was down 20% Thursday evening after the company reported weak first-quarter earnings the day before.
- The CRM company’s decline continued across the broader index it is a part of, with the Dow Jones Industrial Average falling about 300 points.
- Exchange-traded funds were also affected, with the iShares Expanded Tech-Software Sector ETF losing more than 5% due to heavy exposure to Salesforce.
Selling power (RCMP) the stock is on pace for its worst one-day loss since 2004, hurting the Dow Jones Industrial Average and a batch of exchange-traded funds (ETFs) with significant exposure to the company or the Dow Jones.
Shares fell Thursday after the customer relationship management company reported first-quarter revenue below analysts’ estimates and provided management advice it was also weaker than expected.
The Dow Jones fell more than 400 points before pulling back a bit, causing ETFs to follow the trend. Dow downward trend.
The SPDR Dow Jones Industrial Average ETF (DIA), the largest ETF tracking the 30-stock index with more than $32 billion in assets, fell 0.7% on Thursday. Salesforce is the ETF’s seventh-largest holding, making up about 4.64% of its portfolio.
Salesforce’s fall hurts some tech ETFs
The iShares Expanded Tech-Software Sector ETF was a big loser on Thursday (IGV), which holds 8% of the capital Selling power. The ETF has about $6 billion in assets, according to company data, and was down more than 5%. The SPDR Technology Select Sector SPDR (XLK) was down 2% and has 2.7% exposure to the company. This ETF is more heavily exposed to Microsoft (MSFT) and Apple (AAPL), with stakes of around 20% in each.
Another big drop Thursday was the $5.2 billion First Trust Dow Jones Internet Index Fund (FDN), which focuses on the technology components of the Dow Jones. The fund was trading down 3%, reflecting 4.88% exposure to Salesforce shares.