Tech stocks braced for sell-off as US results set to disappoint

Oliver Smith
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TECH stocks could be in for another hammering this week as nearly a tenth of the companies in the S&P 500 prepare to report what is expected to be the weakest quarter of profit growth since 2009.

Analysts warn that last week’s dramatic sell off of tech, biotech and online retails stocks – that saw the Nasdaq, the preferred stock exchange for US tech firms, drop 6.3 per cent to 3999.73 – could continue through the US results season.

“Tech company earnings will be under intense scrutiny with investors likely to dump their tech stocks on even the faintest sign of bad news out of a company,” said ETX Capital market strategist Ishaq Siddiqi.

This week Yahoo, Intel, Google and IBM are all expected to post soft results with investors looking towards second quarter guidance for reassurance that disappointing first quarter earnings were merely the result of severe US weather conditions.

“Investors may be willing to look through poor first quarter results brought on by adverse weather conditions if managements offer evidence of improving business activity,” Goldman Sachs said in a recent note.