Investors dumped their holdings in cloud-based software stocks on Wednesday, taking profits in last year’s hottest names and shifting cash to other sectors expected to benefit from an economic recovery late this year.
For the past few weeks, cloud software stocks specifically and high-multiple tech stocks generally have wavered as the yield rose on the 10-year Treasury note. Wednesday’s spike in rates is clearly hurting those stocks again.
Cloud-based exchange-traded funds were pummeled, with the
Global X Cloud Computing ETF
(ticker: CLOU) down 5%, the
WisdomTree Cloud Computing Fund
(WCLD) off 5.5%, and the
ProShares Ultra Cloud Computing ETF
(SKYU) down 6.8%. The
Nasdaq Composite index,
rich in tech stocks, fell 2.7%.
The tech sector is a sea of red, with cloud stocks taking the brunt of the damage. The list of cloud stocks down 5% or more on Wednesday includes
(PD), among others.
Investors dumped stay-at-home plays, with
(PLTN) each down about 8%.
(ROKU) were down 5% each.
E-commerce stocks like
(W) all had losses of 5% or more on the session. Security software stocks are suffering similar losses, with semiconductor names mostly lower, but with losses of smaller magnitude.
Among the few tech names trading higher are the reopening plays.
(LYFT), which on Tuesday raised its guidance for the March quarter, was up 8%. Rival
(UBER) was up about 3%, while
was up 1%.
A handful of legacy tech stocks are higher as investors anticipate higher IT spending as the economy recovers. Gainers included
Write to Eric J. Savitz at [email protected]