Market Overview

Tech Sector Set To Lead Stocks Lower Again

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Tech Sector Set To Lead Stocks Lower Again

Tech stocks are taking another hit Monday, continuing Friday's massive sector-wide sell-off.

The Technology Select Sector SPDR Fund (NYSE: XLK) was down more than 1.3 percent at the open.

The "FAAMG" stocks — Facebook Inc (NASDAQ: FB), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT) and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) — were all down by as much as 3 percent.

The sell-off began following Goldman Sachs analyst Robert Bouroujerdi’s comments that mega-cap technology companies have created a "valuation air pocket."

Tech Companies Linking Up

On Monday morning, Foxconn announced that Apple and Dell Inc have joined it in bidding for Toshiba’s highly prized chip unit, Reuters reported.

Alphabet, Microsoft and Cisco Systems, Inc. (NASDAQ: CSCO) are also in talks with Foxconn about joining the consortium.

Western Digital Corp (NASDAQ: WDC) and Broadcom Ltd (NASDAQ: AVGO) are also said to be making their own competing bids for the second-largest NAND producer in the world.

Despite the news, only Cisco was trading higher at Monday’s open.

Pandora Media Inc (NYSE: P) announced Friday will receive a $480 million investment from Sirius XM Holdings Inc. (NASDAQ: SIRI) and also confirmed the sale of Ticketfly to Eventbrite for $200 million, boosting the stock before it fell with the others by nearly 4 percent.

Yahoo! Inc. (NASDAQ: YHOO) was also seeing strength early Friday on the confirmation of its takeover by Verizon Communications Inc. (NYSE: VZ) and raised guidance by Alibaba Group Holdings Ltd (NYSE: BABA), in which Yahoo holds a major stake.

E3 Looms

The annual Electronic Entertainment Expo is set to open on Tuesday, which should provide a cushion for tech stocks exposed to the gaming industry.

On Sunday. Microsoft revealed a new console, but the news hasn’t seemed to benefit the stock as of yet.

Today's Outlook

Of the companies discussed, only Cisco and Verizon were up as of 10:30 a.m. ET.

Semiconductor, entertainment-related and social media stocks were also all generally down, indicating that investors' huge downward shift in perspective will continue.

Related Links:

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Analysis: Even An iPhone Super Cycle Doesn't Make Apple Shares A Buy At These Levels

Posted-In: News Intraday Update Markets Movers Tech Best of Benzinga

 

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