Hard-hit Nasdaq put on bear market watch

February 09 22:18 2016

The tech wreck circa 2016 has put the technology-dominated Nasdaq composite within striking distance of a bear market. After Monday’s tech rout, which dragged the Nasdaq down nearly 2%, the stock index, still best known for its meltdown in 2000 when the Internet stock bubble burst, is down 17.9% from its July 20, 2015, closing peak of 5,218.86. The drop is far worse than the descent suffered by the benchmark Standard & Poor’s 500 stock index, which is down 13% from its May peak.nasdaq-stock-market

The general definition of a bear market is a decline of 20% or more from a prior record peak. The once high-flying Nasdaq is being repriced lower in a major way after a heady run-up. The Nasdaq has outperformed the S&P 500 for the past three years, posting gains of 38.3% in 2013, 13.4% in 2014 and 5.7% last year, when the S&P 500 declined about 1%.

The fall, once again, is being attributed to pricey tech stocks getting reappraised at lower prices by stock buyers. Indeed, much of the pain is being felt by last year’s tech names that led the Nasdaq charge higher. In just the past two trading days, for example, social media giant Facebook has tumbled 9.7%, online retailer Amazon.com is off 9%, video streaming service Netflix is down 7.1% and seach giant Google parent Alphabet is off more than 4%.

It often is said that bear markets gain steam when former market leaders finally getting taken down. Well, last year’s best are now badly injured and vulnerable to one final bear attack. In morning trading, the Nasdaq was down 0.3% to 4271.