Most clients know technology stocks are getting hammered. But just how bad is the selling?
Pretty bad, it turns out, according to TradeStation’s award-winning platform. This chart compares the Select Technology Index ($XLK.IV) to the Select Consumer Staples Index ($XLP.IV). It shows tech is now lagging by the widest margin since the financial crisis in October 2008.
![](https://www.tradestation.com/insights/wp-content/uploads/sites/2/2018/11/XLK_v_XLP_20181119-1024x668.jpg)
Today’s big names in the news are Apple (AAPL) and Facebook (FB). AAPL fell on yet another report about lower iPhone production, while FB slid to a new 52-week low amid infighting between high-ranking executives Mark Zuckerberg and Sheryl Sandberg.
But the selling runs much deeper. For instance, semiconductor stock Nvidia (NVDA) is down the most within the Nasdaq-100, continuing its slide from last week’s knarly earnings report. Software companies and electronic-payments firms are also down 4-5 percent despite a lack of news.
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It looks like an intensified liquidation of “growth” stocks. It’s partially about earnings multiples and partly about economic jitters. But the bigger story seems to be a simple shift away from a large bucket of names that’s led the market for several years. Their stories were great for a long time, with each effectively growing their businesses: Streaming video, e-commerce, cloud-computing, data-analysis, smart-phone and chip proliferation.
One by one, these narratives have come under fire. Technical analysts call this “distribution” as long-term investors unload positions.
Still, other parts of the market have pushed upward. Most of them are “boring” or “safety plays.” Here are some S&P 500 companies hitting new 52-week highs today:
- Verizon Communications (VZ): Telecom
- Universal Health Services (UHS): Hospitals
- American Tower (AMT): Wireless towers
- Coca-Cola (KO): Soft drinks
- McDonald’s (MCD): Fast food