US technology stocks fell to its deepest levels in the span of seven years. Analysts say the second best industry of the past decade is vulnerable to more losses based on second-quarter profit estimates.
According to more than 2,000 analysts tracked by Bloomberg, earnings at computer companies will fall 5.5 percent in there months. The group, led by Apple Inc. (AAPL) and International Business Machines Corp. (IBM), trades at 13 times projected profit, the lowest level compared with the Standard & Poor’s 500 since Bloomberg began compiling the data in 2006.
The shares will remain the worst-performing group in the S&P 500 this year with companies and governments spending less on technology as growth weakens in Europe and China.
It is looking as though the economy is going to flatline for a while, after the disappointing numbers from China,” Peter Sorrentino, the president of Huntington Asset Advisors Inc., said in a phone interview.