Shares of tech companies fell sharply as valuation concerns caused a retreat from this year's leading sector.
Shares of Apple declined and are now down roughly 9% from their peak ahead of the new iPhone launch. "It's a case of a 'poisoned Apple' dragging down the whole sector," said Scott Clemons, chief investment strategist at Brown Brothers Harriman. "It's increasingly difficult for reality to match the hype of the new iPhone model, in this case, but tech models in general." The relatively small proportion of recently activated phones that were part of the iPhone 8 line raised the stakes for sales of the premium iPhone X model, whose orders will start to ship in November.
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Ahead of data on the iPhone X, the recent retreat in Apple's shares is part of the "inevitable price volatility and anxiety in anticipation of a new product release," said Mr. Clemons.
China-backed investment firm Canyon Bridge Capital Partners agreed to buy U.K.-based chip designer Imagination Technologies, a key Apple supplier, for about $742.2 million.
Facebook shares fell sharply after several reports about fake Russian accounts on the social network used to shape debate about the U.S. election.
Still, Mr. Clemons said lingering concerns about the valuation of Facebook and other "FAANG" stocks may have more to do with the selloff than the negative headlines.
In addition to Apple and Facebook, Amazon.com, Netflix and Google parent Alphabet -- the other mega cap tech stocks that have led the bull market -- all retreated, with Netflix falling by more than 4%.
"One of the things that has worried me all year, and really going back to the summer of 2016 is how narrowly led this market has been," said Mr. Clemons. Such concentration "tends to make for more fragile market when sentiment turns."
Rob Curran, email@example.com
(END) Dow Jones Newswires
September 25, 2017 17:26 ET (21:26 GMT)