NEW YORK (Reuters) – The withdrawal of the Nasdaq from its all-time highs last month is now officially considered a correction in a bull market.
Monday’s tech-heavy index closed 2.22% unofficially at 12,633.61, about 10.6% below the February 12 record at 14,095.47 and above the 10% threshold of the closing base considered by professionals on market as confirmation of a correction. The Nasdaq entered the last bull market in March last year and rose by more than 105% from the pandemic low of a year ago.
High-tech and state-of-the-art megacap stocks, which account for much of the total value of the Nasdaq market, thrived during the pandemic recession. But many of these stocks are now seen by some investors as overvalued.
More cyclical stocks, which have been affected by the outages and will benefit most from the economic recovery, have since gained favor as the vaccine deploys steam and restrictions are lifted.
For that year, the Nasdaq was down 2.2%, while the S&P 500 and Dow were up 1.7% and 3.9%, respectively.
(This story corrects the start date and the percentage gain of the bull market in paragraph 2)
Reporting by Stephen Culp; Montage by Alden Bentley