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Tech sector suffering most in U.S.

07-05-2010 15:26 BJT

BEIJING, July 5 (Xinhuanet) -- Technology companies are suffering some of the U.S. stock market's biggest losses, sending the Nasdaq-100 Index to the longest losing streak in its 25-year history.

The measure, which gets 63 percent of its value from computer-related companies such as Microsoft Corp and Apple Inc, has declined 9.7 percent after slumping 10 consecutive days. Microsoft has tumbled 26 percent since peaking on April 22, while Apple has fallen 9.9 percent in two weeks.

"There is an orderly liquidation of equity positions by traders who are taking risk units off the table," said Kevin Caron, a market strategist at Stifel Nicolaus & Co in Florham Park, New Jersey, whose clients have about $90 billion in assets. "Nasdaq is typically the home of high beta risk units. It makes perfect sense."

US shares are experiencing the largest losses since the bull market began in March 2009, when the Standard & Poor's 500 Index sank to a 12-year low. The benchmark measure of US equities has fallen in 9 out of the past 10 days as reports on consumer confidence, manufacturing, home sales and employment were weaker than economists surveyed by Bloomberg predicted, fueling concern the recovery is in peril. The S&P 500 fell 5 percent since June 25, the biggest weekly loss since May.

"We're in a psychological bear market," said Robert Lutts, president of Cabot Money Management in Salem, Massachusetts, which oversees $500 million. "The recent economic setback is significant" and investors are bracing for companies to reduce forecasts in the next few weeks, he added.


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