By Yashaswini Swamynathan
REUTERS - The Nasdaq Composite index took a beating for the second trading day as a bout of profit-taking took a toll on the richly-valued technology stocks.
Strong quarterly earnings have helped technology stocks fill a void left by financial and industrial stocks after a post-election rally faded. The S&P 500 technology index has risen 18.5 percent this year and is on track to register its best yearly performance since 2014.
"The real heavy lifting, or 40 percent of the move, that we saw was really on the back of a handful of technology stocks," said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets.
"So when you have a trade that is so crowded that unwind becomes as dramatic as the one we saw on Friday."
Investors saw an opportunity to book profits on Friday after Apple shares plunged amid reports that the company is using slower modems in upcoming iPhones, compared with those used in rival phones.
Shares of the world's most valuable publicly-listed company were off 2.5 percent at $144.93 on Monday.
Mizuho Securities also cut its rating on Apple's stock to "neutral" from "buy" on Monday, citing it has outperformed this year and enthusiasm over the "upcoming product cycle is fully captured at current levels".
The S&P technology sector was down 1.4 percent as other closely watched stocks, including those of Microsoft, Facebook, Netflix and Alphabet, also took a hit.
At 11:01 a.m. ET (1501 GMT), the Dow Jones Industrial Average was down 30.6 points, or 0.14 percent, at 21,241.37, the S&P 500 was down 4.71 points, or 0.19 percent, at 2,427.06 and the Nasdaq Composite was down 46.16 points, or 0.74 percent, at 6,161.76.
Gains in the energy sector and financials helped contain the decline on the broader S&P 500 index.
"Money is finding home in unloved sectors like financials and energy," Hogan said.
Shares of General Electric rose 3.5 percent to $28.94 after the company said Jeff Immelt would retire as chief executive and would be replaced by John Flannery, the head of GE healthcare, ending a years-long succession plan. GE was the top stock on the S&P 500.
Coherus BioSciences tumbled 26.63 percent to $15.25 after the FDA denied the approval of its biosimilar for Amgen's Neulasta. Amgen was up 1.5 at $166.61.
Advancing issues outnumbered decliners on the NYSE by 1,582 to 1,187. On the Nasdaq, 1,398 issues rose and 1,294 fell.
The S&P 500 index showed 28 new 52-week highs and 11 new lows, while the Nasdaq recorded 82 new highs and 70 new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)
Disclaimer: No Business Standard Journalist was involved in creation of this content
