NEW YORK (Reuters) – The retreat of Nasdaq from its highs last month is now officially considered a correction in a bull market.
The technically heavy index declined unofficially on Monday to 2.22% at 12,633.61, about 10.6% below the February 12 record, which closed at 14,095.47, and the 10% threshold for the closing basis set by market professionals, if a confirmation of a correction has been exceeded. The Nasdaq entered the latest bull market last March and rose more than 105% from the pandemic low a year ago.
Market-leading tech and technology-related mega-cap stocks, which make up much of the Nasdaq’s total market value, flourished during the recession of the pandemic. But many of these stocks are now considered overvalued by some investors.
More cyclical stocks, which have stalled under downtime and benefited most from economic recovery, have since gained favor as vaccine deployment takes up steam and restrictions are lifted.
For the year, the Nasdaq fell 2.2%, while the S&P 500 and the Dow rose 1.7% and 3.9% respectively.
(This story corrects the start date and percentage profit of the bull market in paragraph 2)
Reporting by Stephen Culp; Edited by Alden Bentley