:max_bytes(150000):strip_icc()/INV_SalesforceHQ_GettyImages-1175368292-fe62e7feb50b4dc1be30e0b7ca33709f.jpg "Salesforce Stock Sinks, Dragging the Dow and These ETFs With It")
:max_bytes(150000):strip_icc():format(jpeg)/INV_SalesforceHQ_GettyImages-1175368292-fe62e7feb50b4dc1be30e0b7ca33709f.jpg)
Key Takeaways
- Salesforce stock was down 20% in trading late Thursday after the company delivered weak first-quarter earnings the day before.
- The drop in the CRM company was dragging on the broader index it’s a part of, with the Dow Jones Industrial Average down roughly 300 points.
- Exchange-traded funds were also hurt, with the iShares Expanded Tech-Software Sector ETF off more than 5% due to a large Salesforce exposure.
Salesforce (CRM) stock is on course for its worst one-day loss since 2004, hurting the Dow Jones Industrial Average and a batch of exchange-traded funds (ETFs) with meaningful exposure to the company or to the Dow.
Shares fell Thursday after the customer relationship management company reported fiscal first-quarter revenue that came in lower than analysts’ estimates, and provided management guidance that was also weaker than expected.
The Dow fell more than 400 points before pulling back a little, sending ETFs tracking the Dow trending lower.
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% Thursday. Salesforce is the ETF’s seventh-largest holding, comprising about 4.64% of its portfolio.
Salesforce’s Plunge Hurts Some Tech ETFs
A big loser Thursday was the iShares Expanded Tech-Software Sector ETF (IGV), which has an 8% holding in Salesforce. The ETF has around $6 billion in assets, according to company data, and was down more than 5%. The SPDR Technology Select Sector SPDR (XLK) was lower by 2%, and has 2.7% exposure to the company. That ETF is more heavily exposed to Microsoft (MSFT) and Apple (AAPL), with holdings of around 20% in each.
Another big decliner Thursday was the $5.2 billion First Trust Dow Jones Internet Index Fund (FDN), which focuses on the technology components of the Dow. The fund was trading down 3% in reflection of a 4.88% exposure to Salesforce stock.