Earnings reports from Google’s parent company, Alphabet, and Tesla on Tuesday led to a drop in big tech stocks, while shares of smaller companies remained strong.
The Russell 2000, an index of smaller companies that’s considered to be more tied to the ebb and flow of the economy, was down just 0.48 percent, in line with trading in recent weeks and indicating that shares of smaller companies stayed relatively robust.
Investors were expecting perfection from the tech giants’ earnings reports, said Daniel Ives, a tech analyst at Wedbush Securities.
“Investors are negatively reacting to any whiff of softness that we see from these big tech players,” he said.
“I think it’s an overreaction after a massive run in tech stocks.”
Persons:
Tesla, Russell, Daniel Ives, Ives, ”, “
Organizations:
Nasdaq, Wedbush Securities