NEW YORK - Solid quarterly earnings from America's biggest tech firms weren't enough to keep investors from selling late on Thursday , the latest sign sentiment is turning against ultra-expensive digital megacaps.
"As we've seen in reactions from some of the earnings from these large companies even beats are not strong enough to satisfy this market, which I think speaks to how fully valued a lot of these stocks are," said Evan Brown, head of multi-asset strategy at UBS Asset Management. Facebook was little changed even after sales topped estimates when it warned of continued uncertainty due to Covid next year and said plans to spend heavily on employees and new technology. The social network makes up more than 4 per cent of Nasdaq's holdings.
More on this topic Twitter also reported on Thursday and its shares got hammered on concern about its user growth. Third-quarter sales exceeded estimates and results were boosted by a return of advertisers who had fled or pulled back from the website during the early stages of the pandemic. The stock lost 14 per cent.
"It tells us that even though these stocks are below their late-summer highs, they're still expensive," said Matt Maley, chief market strategist at Miller Tabak + Co."So unless they beat expectations in a significant way, investors are taking further profits. Who can blame them, given that the capital gains tax is going to rise if Biden wins next week?"
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