Are tech stocks losing their top-dog status on Wall Street? – USA TODAY

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The blue chip index broke through the 24,000 milestone for the first time Thursday. The Dow and Nasdaq closed at record highs. Fred Katayama reports. Video provided by Reuters Newslook

There’s a potential “changing of the guard” underway on Wall Street.

In the past five trading days, technology stocks – which have been leading the market higher the entire year – have turned lower. Taking tech’s top-dog role on Wall Street are bank shares and oil-related stocks and companies that transport goods via trains, trucks and airplanes.

Consider the tech-stock-dominated Nasdaq. It has been the biggest gainer of all the major U.S. stock indexes this year, but has tumbled 1.5% the past five sessions, and its 100 biggest companies have dipped more than 2%.

In contrast, the Dow Jones transportation average, which includes package delivery names like FedEx and UPS, railroads like Kansas City Southern and Norfolk Southern, and airlines like Southwest and JetBlue, have shot up more than 8%.

Similarly, the KBW Bank index, which includes big banks like J.P. Morgan and Bank of America, are also up more than 8%. An index of oil related stocks is up more than 6%.

“Our theme of ‘changing of the guard’ continues to play out,” says Gary Kaltbaum, president of money-management firm Kaltbaum Capital Management.

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In Wall Street-speak, a market “rotation” is underway as investors sell winners like tech and move their cash to other parts of the market. The good news is that investors aren’t fleeing the market altogether, but instead moving some cash out of once-hot tech stocks into stocks that are viewed as offering more value.

“Stock market leadership is experiencing an aggressive rotation, from momentum stocks to low volatility (shares) and from technology to banks, Richard Turnill, global chief investment strategist at BlackRock.

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Tech stocks lifted the major indexes to record highs Tuesday. As Fred Katayama reports, the S&P 500 bolted past the 2600 mark intraday but closed just below it. Video provided by Reuters Newslook

 

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