Tech Down Sharply As Treasury Yield Rally Weighs On Risky Sectors -- Tech Roundup

Shares of technology companies fell sharply as traders fled the riskiest corners of the stock market.

A surge in Treasury yields has presented opportunities for higher returns with lower risk, causing investors to sell out of the sectors that provided the largest returns in 2021. The SPDR Select Sector Technology exchange-traded fund, which tracks the tech sector of the Standard & Poor's 500, is down about 7% for the year to date, on the cusp of correction territory.

One money manager said the sense that the Omicron variant will not trigger a return to the "stay-at-home" economy has also pushed investors out of the tech sector. "This Covid spike has not been met by the same stock performance as others," said Brent Schutte, chief investment strategist at money manager Northwestern Mutual Wealth Management.

"In the past, when you had a Covid spike, people moved more to growth stocks, tech stocks, stay-at-home stocks. Maybe the market ... has belief that there is optimism, or light at the end of the tunnel, with regards to Covid."

Software and gaming giant Microsoft agreed to buy Activision Blizzard in an all-cash deal valued at $68.7 billion, using its largest acquisition by far to grab a videogame heavyweight that has been roiled by claims of workplace misconduct.

Apple warned that Senate legislation aimed at reining in large tech companies would weaken a new privacy-protection tool it recently launched to tame "targeted advertising."

 Write to Rob Curran at [e-mail] 

(END) Dow Jones Newswires

01-18-22 1728ET