by Stephen Culp

NEW YORK (Reuters) – The New York Stock Exchange closed lower on Friday after a volatile session, following chaos triggered by a global computer outage and ahead of earnings releases from major stock exchanges next week.

The Dow Jones fell 0.93% to 40,287.53, the S&P 500 lost 0.71% to 5,505 points and the Nasdaq Composite fell 0.81% to 17,726.94 points.

Of the 11 major sector indices in the S&P 500, energy was the biggest decliner, as crude prices hit their lowest level since mid-June on the strengthening prospect of a ceasefire in Gaza. Only health care and utilities ended in positive territory.

Over the week, the Nasdaq and the S&P 500 recorded their worst weekly streak since April. The Dow, which had a series of records at the start of the week, ended on a positive note.

A software update to the CrowdStrike cybersecurity platform for Microsoft’s Windows operating system has caused malfunctions around the world, forcing planes to make unplanned stops and crippling banking services.

CrowdStrike plunged 11.1%, while rivals Palo Alto Networks and Sentinal One gained 2.2% and 7.8%, respectively.

“This technological failure adds uncertainty and pressure on the Nasdaq,” said Robert Pavlik, portfolio manager at Dakota Wealth (Connecticut) during the session.

“But it won’t have a very big impact. Not only is it a summer Friday, but with this outage, investors (…) are staying away. That’s what happens on the stock market when volatility takes over.”

The CBOE Volatility Index hit its highest level since late April.

“If you wanted to fly today, it wasn’t a very fun day. But in the end, for the markets, it seems pretty anecdotal,” said Ryan Detrick, a strategist at Carson Group in Nebraska. “After a historic rally since May, the market just seems to be trying to catch its breath,” he added, assuring that traders had “reacted very calmly to these massive outages.”

In his eyes, the uncertainty is more about the state of the American economy after a very positive first week of quarterly results (83% of the 70 S&P 500 companies that published their results beat the consensus).

“But the heavyweights start publishing next week and what we want to know is the strength of consumption and the growth outlook.”

Results from Tesla, Alphabet, IBM, General Motors and Ford are particularly expected.

The semiconductor sector, which has been down since Bloomberg reported Wednesday that the United States was considering new restrictions on chip exports to China, continued to falter, led by Nvidia.

Netflix fell 1.5% after warning that its third-quarter subscriber additions would be lower than the same period last year.

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