“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.”
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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