“We’ve been in a little bit of pull-back on some of the tech stocks for the last few days. I think it’s just a matter of the fact that they have had a very strong run,” Randy Frederick, vice president of trading and derivatives for Charles Schwab, told Reuters. “The bull market is sort of broadening out and people are taking a few profits off the table on some these stocks that have done exceedingly well.”
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Investors have been betting on earnings to support the relatively loft valuations in U.S. equities, with the S&P 500 trading at about 18 times estimates for the next 12 months, compared to long-term averages of 15 times.
Of the 289 S&P 500 companies that have reported since Friday, 73% beat expectations, compared to to the 71% average over the past year.
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