Valuation Scare in Nasdaq Arrives at Wrong Time for U.S. Bulls
- FANG stocks slide by average of 7.6 percent in three days
- Nasdaq slumps 19 percent from July high to near bear market
This article is for subscribers only.
Before last week, it would have been hard to say valuations were a pressing concern for U.S. stocks -- particularly after 2015’s market was propped by a handful of companies with triple-digit multiples. That’s changing.
Declines in last year’s stalwarts, from Facebook Inc. to Amazon.com Inc., punished the Nasdaq Composite Index for the third straight day Tuesday, pushing the gauge’s rout since the July record to 19 percent and leaving it at the lowest since October 2014. Once again, selling was heaviest in shares with the highest price-earnings ratios and among momentum stocks, causing the engine of the bull market to sputter as it nears its seventh anniversary. The gauge added 0.4 percent at 9:50 a.m. in New York.