Class rotation prompted heavy losses in technology stocks and gains in banks, industrials and other reboot beneficiary stocks, leaving the Nasdaq and Dow extremely divergent. The Nasdaq Composite Index closed down 2.4% on Monday (8), having fallen back from its highs by a 10% correction definition, with Apple shares (AAPL-US) closing at a new low of more than three months, having fallen back from its highs by an increasingly close 20% bear market definition.
Apple closed down 4.17% to $116.36 per share, down 18.7% from its all-Time high on Jan. 26, and now has a market capitalization below the $2 trillion mark, reporting $1.96 trillion on Monday. If Apple continues to fall below $114.53 per share, it would meet the definition of a bear or short market with a 20% drop. Over the past three months, Apple has fallen a total of 5.7%.
The Nasdaq 100, which is made up of the top 100 non-financial stocks in the index, also fell back more than 10% and is in correction, while the Dow Jones outperformed and even hit a new record high during the day. This is the biggest divergence between the Dow Jones and the Nasdaq 100 since 1993.
Mike Bailey, head of research at FBB Capital Partners, said, “Investors are bullish on the economic recovery and hope that as economic fundamentals improve, holding technology stocks and growth stocks outside of large-cap stocks with more reasonable stock prices, driving the Dow Jones to climb to new highs.”
Dow 30 blue chips closed Monday only five files closed in the black, disney, Visa, Goldman Sachs and Home Depot rose sharply, that Starck 100 is with Apple, tesla sank. Previously hot loan-related stocks, in this wave of class rotation fell more heavily.
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