Flight to brand names?
Illiquidity on the part of market makers and selling from momentum players exacerbated the tech downfall Tuesday, said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum.
"No doubt a lot of the tech selling was driven by margin calls," Hyman added. And the need to raise capital to make up for underwater positions caused the drop in many of the blue-chips, he added.
The appetite for technology isn't over, Hyman said, but he believes the market will use a more discriminating eye in picking stocks going forward.
"The Nasdaq will have a very different profile," Hyman continued. "Appetite will surface for the brand names."
The market is going through a weeding-out process, Hyman said. He believes participants will use the recent fall to scoop up blue-chip tech stocks at cheaper levels.
The Nasdaq shakeout puts a premium on quality, Liro said.
In fact, the quality names are getting hammered less than the overall market and Liro believes good earnings results will help stabilize blue-chip Nasdaq stocks.
An afternoon comeback in names like Cisco Systems, Hewlett-Packard, Dell Computer, Intel, EMC, Sun Microsystems and Yahoo helped the Nasdaq make an astounding move off its lows Tuesday. |
