CrowdStrike Tumbles Amid Widespread Tech Outage

Major U.S. equities indexes moved lower on Friday as a major technology outage affected businesses around the world, grounding flights and disrupting financial transactions.

Concerns about malfunctioning computer systems compounded what had already been a tough week for the tech sector, with big-name stocks battered by geopolitical tensions and uncertainties surrounding international trade.

The S&P 500 fell 0.7% on the final trading day of the week. The IT turmoil added to pressures on the tech-heavy Nasdaq, which lost 0.8% on the day. The Dow dropped 0.9%, retreating further from the record closing high seen earlier this week.

The S&P 500 and the Nasdaq were in negative territory for the full week, while the Dow held onto a weekly gain.

Cybersecurity firm CrowdStrike Holdings (CRWD) was at the center of the technological mayhem, as a defective software update from the company led to widespread outages. Since CrowdStrike provides security software to major cloud computing platforms, including Microsoft’s (MSFT) Azure, the incident had a far-reaching impact, disrupting operations for major airlines, health care facilities, and financial institutions, among other businesses. Shares of CrowdStrike plummeted 11.1%, marking the heaviest losses of any S&P 500 stock.

Shares of commercial lines insurance firm W.R. Berkley (WRB) dropped 8.3%. The company could face a flurry of business interruption insurance claims as a result of the CrowdStrike outage, although many policies are unlikely to include coverage for this type of event. W.R. Berkley is set to post its latest quarterly results before the markets open on Monday morning.

Shares of fellow insurer Travelers Companies (TRV) also lost ground on Friday, declining 7.8% after the company released its second-quarter earnings report. Although quarterly revenue and net premiums written came in higher than the year-ago period, both figures fell short of analysts’ estimates. Travelers also reported an increase in catastrophe losses, citing severe storm activity, while investment losses also jumped over the year.

Intuitive Surgical (ISRG) shares notched the day’s top performance in the S&P 500, soaring 9.3% to a record high after the manufacturer of robotic medical devices topped sales and profit forecasts with its second-quarter results. Robust demand for the company’s da Vinci robotic surgical device helped drive the strong performance, with a 17% year-over-year increase in procedures performed using the system.

Starbucks (SBUX) shares jolted 6.9% higher amid reports that activist investor Elliott Investment Management has accumulated a significant position in the coffee giant. According to The Wall Street Journal, Elliott has held discussions with Starbucks in recent weeks about ways to improve the company’s performance. However, the exact size of Elliott’s stake and any particular changes the firm may push for remain unknown.

Huntington Bancshares (HBAN) stock advanced 3.9% after the bank holding company reported better-than-expected revenue and earnings per share (EPS) for the second quarter. Although net interest income fell year over year, Huntington’s average loans and deposits moved higher.

United Airlines (UAL) shares gained 3.3% on Friday, recovering losses posted in the previous session after the carrier released quarterly results. United’s second-quarter revenue missed estimates, and the airline provided a muted forecast for the current quarter, citing a slowdown in air travel demand. However, analysts at Citi suggested these expectations may already be priced in after rival Delta Air Lines (DAL) highlighted demand concerns in its earnings report last week. Analysts also said United has benefitted from strong cost management and lower fuel expenses.