Shares of tech companies fell as the market leaders of the first half of the year, mega cap technology stocks, continued their fall from grace.
Analysts at Goldman Sachs said the market capitalizations of Facebook, Amazon.com, Apple, Microsoft and Google have risen so dramatically this year that the risk of "mean reversion" is growing. There is an underlying logic to the clamor of investors to get into these stocks, but the gains are nevertheless creating unsustainable distortions. These five stocks represent 13% of the S&P 500 but are responsible for about 40% of the index's gains for the year to date.
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"Parallels to the 'Nifty-Fifty' and 1999-2000 are growing as their performance is even more pronounced on a risk-adjusted basis," the Goldman analysts said.
In a separate note, Goldman strategists warned that the "Goldilocks," not-too hot and not-too cold economic scenario that favored the mega cap tech stocks could be fading.
"Signals inside the market point to slowing growth," the Goldman analysts warned.
Emil Michael, Uber Technologies' business chief and one of Chief Executive Travis Kalanick's closest lieutenants, has left the company after the board pushed for his removal following a months-long investigation into the company's workplace culture.
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(END) Dow Jones Newswires
June 12, 2017 16:40 ET (20:40 GMT)