(Updates to mid-afternoon)

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Indexes down: Dow 0.37%, S&P 500 0.62%, Nasdaq 1.17%

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Tesla shareholders approve $1 trillion CEO pay package

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Microchip Technology ( MCHP ) falls following its disappointing

sales

forecast

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Expedia ( EXPE ) jumps after annual revenue growth forecast hike

By Stephen Culp

NEW YORK, Nov 7 (Reuters) - U.S. stocks extended their

selloff on Friday as investors turned the page on a

roller-coaster week with economic worries, the longest-ever

federal government shutdown, and sky-high tech stock valuations

dampening risk appetite.

All three major U.S. equity indexes were lower, with the

tech-laden Nasdaq showing the steepest percentage loss.

The selloff punctuates a tumultuous week marked by mounting

concerns over inflated valuations of artificial

intelligence-related momentum stocks, which have provided much

of the upside muscle to the stock market's rally over recent

months.

All three indexes were on course to lose ground from last

Friday's close, with the S&P 500 and the Nasdaq headed for their

largest weekly percentage drop since late March.

The information technology sector and broader

semiconductor index were set for their biggest weekly

declines in seven months.

The Philadelphia SE Semiconductor index was off 2.9%, and

was also on a path toward its worst weekly performance since

March.

The Russell 2000 hit an over seven-week low. The CBOE

Volatility Index, a barometer of investor anxiety,

touched its highest level in three weeks.

"After a record six-month rally, some type of indigestion was

always possible and we think that's what's happening," said Ryan

Detrick, chief market strategist at Carson Group in Omaha. "The

big question is whether this just a near-term hiccup or

something bigger."

A congressional impasse has resulted in the longest

government shutdown in U.S. history, fueling concerns over its

economic effects.

Those concerns were on full display in the University of

Michigan's preliminary take on November Consumer Sentiment,

which fell to its lowest level in over three years. Survey

participants' assessment of current conditions plunged to its

most pessimistic reading in the survey's history. Overall

sentiment has slid 29.9% since November 2024, when U.S.

President Donald Trump was elected to his second term in the

Oval Office.

The shutdown has also led to a blackout of official economic

indicators, complicating the Federal Reserve's dual mandate of

promoting full employment and price stability.

"Flying in the dark in the absence of economic data due to

the shutdown is weighing on investors as well, adding a layer of

uncertainty," Detrick added. "We know earnings were strong, but

the housing market is weak."

"Clearly the labor market is weakening and investors are

taking a sell first, ask questions later mentality so far in

November."

On the trade front, Beijing has begun creating a new rare

earth licensing program that could speed up shipments but is

likely to fall short of Washington's hopes for a complete

rollback of restrictions.

The Dow Jones Industrial Average fell 173.65 points, or

0.37%, to 46,738.65, the S&P 500 lost 41.97 points, or

0.62%, at 6,678.35 and the Nasdaq Composite dropped

269.47 points, or 1.17%, to 22,784.52.

Third-quarter reporting season continued to barrel toward

its conclusion, with 446 of the companies in the S&P 500 having

reported. Of those, 83% have delivered better-than-expected

earnings, according to LSEG data.

Analysts now predict year-on-year S&P 500 earnings growth of

16.8% for the July-September period, a significant improvement

over the 8.0% annual growth.

Microchip Technology ( MCHP ) shares dropped 8.1% after

forecasting quarterly net sales below estimates.

Tesla shareholders approved the largest corporate pay

package in history for CEO Elon Musk. The electric vehicle

maker's shares fell 2.8%.

Shares of Expedia ( EXPE ) surged 17.9% after the travel

platform reported solid bookings from its business-to-business

segment.

Block slumped 8.0% after missing third-quarter

profit expectations, and Take-Two Interactive fell 8.3%

following the company's decision to delay the launch of its

popular video game GTA VI to November 2026.

Declining issues outnumbered advancers by a 1.25-to-1 ratio

on the NYSE. There were 71 new highs and 189 new lows on the

NYSE.

On the Nasdaq, 1,665 stocks rose and 2,895 fell as declining

issues outnumbered advancers by a 1.74-to-1 ratio.

The S&P 500 posted 11 new 52-week highs and 14 new lows

while the Nasdaq Composite recorded 28 new highs and 309 new

lows.