LIVE MARKETS-Tech selloff not a "buy" signal

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TECH SELLOFF NOT A "BUY" SIGNAL

Thursday's selloff in tech-related stocks does not suggest a buying opportunity, according to David Bahnsen, chief investment officer at The Bahnsen Group.

Bahnsen says in a note that the selloff is driven by valuations that are disconnected from reality, and that even with the sharp declines on Thursday, valuations in the tech sector remain too high. The selloff, he says, is a reminder that the S&P 500 .SPX is too heavily concentrated in tech-related names.

He suggests that investors look for opportunities in defensive areas of the market instead, such as consumer staples and energy companies, which tend to have stable cash flows and a history of dividends.

Wall Street's selloff on Thursday, with the Nasdaq .IXIC set to confirm it was in a correction and the S&P 500 last down more than 3%, follows fears of tougher AI regulations after Democrats won control of US Congress in Tuesday's midterm elections.

(Caroline Valetkevitch)

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