Tech stocks drag down Nasdaq

A tale of two markets Tuesday. The Nasdaq slid further amid a sector rotation that favored blue chip stocks. Investors picked up stocks that suffered during the health crisis such as energy, industrials and consumer staples…. And unloaded high-flying stocks of tech and communication services companies that had benefited from the lockdowns and social distancing.

The Nasdaq extended Monday’s decline, falling 1.4%. The S&P shed a fraction. But the Dow added nearly 1%.

O’Neil Global Advisors chief investment officer, Randy Watts says look for some choppiness ahead:

“It doesn’t seem like this rotation is done yet. Normally when there’s a rotation in the market, it tends to cause volatility. When old leaders fall, that can cause some issues.”

Weighing heavily on the Nasdaq: tech titans that boomed during the work-from-home trend such as Microsoft and Amazon, which declined more than 3%. Apple shares also slipped after the iPhone maker introduced its first notebook computer with a microprocessor that it designed in-house, shifting away from reliance on Intel’s technology.

Shares of Ulta Beauty shot up 7%. Investors welcomed the cosmetics store chain’s long-term deal with Target that’ll allow it to open its own stores inside the big box retailer’s outlets.