Technology shares - a key engine of the stock market's climb to records over the last several months - are now among those leading Wall Street's plunge on growing concerns over the coronavirus outbreak.
The S&P 500 information technology sector has fallen 9.3per cent since Thursday’s close, outpacing a drop of 7.3per cent for the broader index. Only energy has performed worse, reflecting a sharp decline in oil prices on fears that the coronavirus will slow global economic activity.Investors poured billions into big technology stocks and other momentum bets last year, as a dovish Federal Reserve stoked risk appetite and fueled a rally of more than 30per cent in the S&P 500.
“Everyone just got a full helping of tech stocks up at the high. It was some of the most reckless buying I’ve seen in my lifetime,” said Christopher Stanton, chief investment officer at Sunrise Capital Partners.Stanton rode shares of Amazon and other big technology names higher last year. He now owns derivatives will rise if the tech-heavy Nasdaq Composite index continues to decline.
Just four companies - Microsoft, Apple, Amazon and Google-parent Alphabet - accounted for 46.4per cent of the 2020 total return as of Friday, Silverblatt said.
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