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Tech was the worst performing sector on Thursday and trader Joe Terranova says investors should take heed.He thinks it's signaling something big.
First he's troubled by the negative price action. This year tech had led advances, not only as investors bet on the future but also as a beneficiary of high unemployment as companies turn to technology, rather than hire, to generate greater efficiencies.
It's never good for a rally to lose its leader.
However, on top of the negative price action, Terranova is concerned by the commentary coming from a few major companies.
Earlier in the week Dell spooked Terranova and much of the Street when it said guidance would be updated in August. “If they were confident that the headwinds (facing PC sales) were temporary they would have tackled that guidance issue," adds Terranova. But they didn’t. That suggests to Terranova that Dell expects headwinds will remain at least another quarter.
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