Tech stocks get hit the hardest as markets fall
Tech stocks took a drubbing Thursday as the Nasdaq slid more than 1.4% and the Dow faced its biggest one-day drop in more than a month.
The market decline stems partly from concerns that legislative actions in Washington, D.C. are slowed, said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.
“Overvaluations in the technology sector” also prompted investors to sell, he said.
Shares of Apple, Facebook, Netflix, Amazon, Microsoft and Google-parent Alphabet all declined, underscoring volatility in the tech sector.
The Nasdaq Composite Index tumbled 90.06 points, or 1.44%, to 6,144.35 The Dow Jones industrial average was down 167.58 points, or 0.78%, to 21,287.03, its largest drop since May 17. The Dow was down as much as 1.3% before paring back losses.
Nearly all sectors, except for financials and energy stocks, registered losses Thursday. But Nasdaq led the sell-off.
“It is pretty crowded. Everyone owns the same stocks,” said Bruce Bittles, chief Investment strategist at Robert W. Baird & Co. “It is natural they get hit the hardest in a sell-off.”
As the second quarter winds down, investors are also reassessing the next three months, shuffling their portfolios and taking profit on the gains of the leading tech stocks, said Joseph Quinlan, chief market strategist at U.S. Trust, Bank of America Private Wealth Management. “I see this pullback as a buying opportunity,” he said.
Amid the market woes, shares of tech start-up Blue Apron began trading Thursday, rising as much as 10% before closing the day flat. The company ships boxes of ingredients to customers to make home-cooked meals.
With Wall Street paying close attention to technology stocks for much of the year, investors could be scouring the market for bargains in other sectors — financials, healthcare and industrial companies — that may be poised for a rebound, Quinlan said.
The S&P 500 financials index rose 0.65% as investors reacted positively to large banks’ announcements that they will raise dividends and spend billions to buy back shares in the coming months. The Federal Reserve approved their capital plans Wednesday after two rounds of its “stress tests” to ensure banks have enough capital to lend to borrowers in the event of a recession.
It’s too early to tell if the sell-off is a sign that the technology sector is running out of steam, Bittle said. But if the tech stocks haven’t rallied by mid-July, it could signal the end of their market leadership, he said.
Source:-Â https://www.usatoday.com/story/tech/2017/06/29/nasdaq-dips-nearly-2-tech-sell-off/439551001/
