Apple shares dropped a further 0.6% yesterday, making five straight days of decline. There has also been an increase in the number of investors ‘shorting’ AAPL – effectively betting that the share price will fall.

But while some are pointing to the dramatic scale of the total loss in market capitalization, others say that the numbers need to be viewed in context.

One commentary noted that the total loss in value experienced by the five largest U.S. tech companies in one week was enough to have bought Boeing …

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The comparison was drawn by Reuters.

Apple, Alphabet, Microsoft, Amazon and Facebook, the five largest U.S. technology stocks, have seen their combined market capitalization fall by about $120 billion since last Thursday [enough] to buy plane maker Boeing.

By Thursday the S&P 500 technology index SPLRCT had seen its largest five-day drop in a year.

But the piece notes that the short-term decline needs to be viewed in the context of longer-term gains.

The recent decline notwithstanding, the technology sector remains the best performing so far this year, up 17.4 percent versus the overall S&P 500 index gain of 8.6 percent.

It cites several analysts arguing that there is no cause for alarm.

“I think it’s a perfectly normal backing off. Tech has done really well. All of sudden everyone wakes up and says, ‘Holy cow, maybe we’re getting ahead of ourselves,’ and backs off a little bit,” said Brad McMillan, Chief Investment Officer for Commonwealth Financial in Waltham, Massachusetts.

Others note that while the tech sector has seen strong growth, there is concern that too much investment is concentrated in too few companies, and investors are also chasing higher dividend payments at a time when interest rates are low.

“Tech is one of the losing sectors when the interest rate trade is dominating because rates are falling,” said Brian Nick, chief investment strategist at TIAA Investments, an affiliate of Nuveen, because investors need to look for higher yield in dividend paying stocks

An additional factor is investors moving out of stocks and into safer bonds in the light of recent weak U.S. economic data, including a fall in retail sales and slower-than-expected jobs growth.


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