Wall Street Tech Nerves Attract Diversification Recommendations By Reuters


© Reuters.

Por John McCrank

NEW YORK (Reuters) – As a technology-driven rally pushes US stock indices too close to new records, concerns that the prices of major companies in the segment may be “stretched” and that new regulations may be coming has led investors to diversify beyond the leaders of the rally.

Five largest companies in the, Apple Inc (NASDAQ :), Microsoft Corp (NASDAQ:), Amazon.com Inc (NASDAQ:), Alphabet (NASDAQ:) Inc e Facebook Inc (NASDAQ 🙂 now account for 28% of the index and account for 25% of their earnings, Goldman Sachs said earlier this month.

On average, these technology and internet stocks gained 49.23% this year, compared to a 7% gain for the S&P 500, and have risen on average 9.6% since September 21, against 6.6% for the S&P 500. The expectation is that companies will report strong profits in the third quarter in the coming weeks, proving their value in a year in which the coronavirus pandemic supported an economy that works at home while devastating companies related to sectors such as travel, restaurants and fossil fuels.

Still, some fear that technology “megacaps” are exposed to factors that could lessen their fascination in the coming months. Getting long in the industry is the most exhaustively practiced trade ever, according to a recent Bank of America survey of fund managers.

Investors will be on the lookout next week, as third-quarter results report, including Netflix Inc (NASDAQ 🙂 on Tuesday, Tesla (NASDAQ 🙂 Inc and Verizon Communications Inc (NYSE 🙂 on Wednesday, and Intel Corp. (O 🙂 on Thursday. Apple, Amazon, Alphabet, Microsoft and Facebook report the following week.

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