From giddy to glum

san francisco — The stock market’s laws of gravity are ravaging its highest fliers.

Just look at the list of technology trailblazers whose values have plummeted from record highs during the past few weeks. Investors have re-focused on safer sectors such as utilities, health care and consumer staples instead of companies that promise potential growth from online services that are building huge audiences.

Stung by the abrupt change in sentiment, the stocks of recent stars such as Netflix, Facebook, Twitter and LinkedIn are 20 per cent to 45 per cent below their recent peaks. The steep downfall is raising questions about whether this is just a fleeting fit of fickleness or the foreshadowing of another market bubble about to burst.

Stocks across all sectors dropped on Friday. Optimists expect a rebound. They point out that technology remains a bright spot in an otherwise dreary economy as software, computers, mobile devices and the Internet fill increasingly instrumental roles in work, entertainment and communications.

“Tech is where the action is,” says longtime industry analyst Roger Kay.

Pessimists view the tech sector as Ground Zero for a long- overdue reckoning. They say the stock market has been pumped up by the flood of money that the Federal Reserve has funneled into the long-term bond market. Now that those bond purchases are tapering off, people are starting to realise “the only thing holding this balloon up is the Fed blowing air in it,” said Fred Hickey, editor of The High

Tech Strategist. — AP