FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 20 May 2016

Are Tech Stocks About To Crash The Nasdaq?

by Greg Guenthner, Daily Reckoning

You should make a hasty getaway if a big-name tech stock is weighing down your portfolio...

The market continues to lurch lower this week. Retail stocks were the first to burst into flames. Now household tech names and biotech stocks are feeling the market's wrath as the weekend approaches. The Nasdaq Composite is a shell of its former self, lagging the major averages and hosting some of the biggest blow-ups on the market right now.

The Nasdaq Composite dropped another half percent yesterday - even though the Dow Jones Industrial Average managed to finish the day in the green. That's not an isolated incident. The tech-heavy index and the Big Board broke up three weeks ago. In the meantime, the Nasdaq has dropped nearly 5%.


We've kept close tabs on the tech wreck as it has ripped through the market over the past several weeks. And as we warned earlier this month, it could get much worse before it gets better.

In case you haven't bothered to keep track, the list of terrible tech earnings just keeps getting longer. Google's parent company Alphabet missed analyst estimates for earnings and revenue for the first quarter. Microsoft whiffed on first quarter earnings. Twitter has quickly reclaimed garbage stock status as it pushes new lows.

And it's not just the garbage stocks that are dragging the Nasdaq to hell. Even Apple Inc. (NASDAQ:AAPL) and Netflix Inc. (NASDAQ:NFLX) shares are feeling the burn. In fact, these two stocks helped lead the Nasdaq lower yesterday.

What is the Income Play Rich Investors Love? (Hint: It's Tax-Free)

Apple and Netflix each dropped more than 2% Thursday, while Apple pushed new 52-week lows.

These household name stocks aren't going down without a fight as they try to spin some positive news for investors. The good folks at Apple just laid out $1 billion in cash to buy Chinese Uber competitor Didi Chuxing. Does the market care? Not one bit...


Then there's that other tech group - I'm talking about biotech. These stocks staged a nice little relief rally back in late April. While the major averages were taking long walks off short piers, investors actually gobbled up biotech stocks, shunning the "safe" utilities sector.

At the time, utilities had been this year's big winners. The sector was up nearly 17% through early April. Along with consumer staples, this was the place you wanted to be if you were looking to ride out the year's early storm. This rush into biotech changed all that...

But the relief rally was short lived. Now, it's looking more like a dead cat bounce.

Take a look for yourself:


Biotech stocks are getting dangerously close to their February lows. A break below this mark would probably lead to even more carnage in the sector.

We're already seeing some of the biggest biotech names crumble this week.

John Murphy notes on his blog that Biogen (NASDAQ:BIIB) has once again dropped below its 50-day moving average, while Gilead Sciences (NASDAQ:GILD) is perilously close to posting new 2016 lows. These are major Nasdaq names that have the potential to drag the entire biotech sector lower...

Whether we're talking big-tech or biotech, these aren't the sectors you want to jump into right now for trades on the long side. And if the these sectors can't contain the damage, lower prices are sure to spread to the rest of the market...

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Investing


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Finance and Growth: The Direction of Causality
The Destruction of the Existing Workforce
News Blog
Most Flags Combine Red, White And Blue
Electroconvulsive Therapy: A History Of Controversy, But Also Of Help
Super Bowl Ad Prices Doubled In A Decade
What We Read Today 21 January 2017
People Who Laughed At TRUMP...and Said He Would Never Be President
Disentangling Cyclical From Structural
Rent Growth For Lower-Priced Rental Homes Stayed Strong, But Higher-Priced Rental Homes Slowed In 2016
How Do Imports Affect Manufacturing Jobs?
Active Vs Passive Investing: And The Winner Is ...
Infographic Of The Day: The Incredible Pigeon
Early Headlines: Global Unaffordable Housing, Trump Signs ACA Exec Order, Trump Orders Halt To Regs, Enrollments Increase, Greek Tragedy, China Household Debt Surges And More
The Rise Of The Gluten-Free Diet
Who's Smoking In The U.S.
Investing Blog
Technical Thoughts: Three From The Trading Room
Why Are Investors Moving To ETFs?
Opinion Blog
Economics, Society, And The Environment: What's Wrong With This Picture?
How To Read Theresa May's Brexit Speech
Precious Metals Blog
Four Catalysts Drive Gold And Silver For 2017
Live Markets
20Jan2017 Market Close: U.S. Stocks Were Up But Off Their Highs Of The Session, Crude Prices Continue To Climb, Next Week May Be Volatile
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved