NEW YORK (Reuters) – The Nasdaq’s pullback from its all-time highs last month is now officially considered a correction in a bull market.
The high-tech index closed Monday down 2.22% unofficially to 12,633.61, roughly 10.6% below the record close on February 12 at 14,095.47 and exceeding the baseline closing threshold of the 10% considered by market professionals as confirmation of a correction. The Nasdaq entered the last bull market last March and was up more than 105% from the pandemic’s low a year ago.
Market-leading technology and technology-adjacent megacap stocks, which account for much of the Nasdaq’s total market value, thrived during the pandemic recession. However, some investors now consider many of those stocks to be overvalued.
More cyclical stocks, which were hit by the closures and which would benefit the most from the economic recovery, have since gained favor with vaccine implementation and restrictions are lifted.
For the year, the Nasdaq is down 2.2%, while the S&P 500 and the Dow are up 1.7% and 3.9%, respectively.
(This story corrects the start date and bull market profit percentage in paragraph 2)
Reporting by Stephen Culp; Edited by Alden Bentley