Tech Stocks Were More Than 75 Percent of October Market Rally

(Bloomberg) -- If you haven’t been holding tech stocks, you’ve probably missed out on the rally.

The technology sector accounted for more than 75 percent of the S&P 500 Index’s return in October, according to a new note from Bank of America Corp. Apple Inc., which reports earnings after the market closes Thursday, was the biggest contributor, accounting for 16 percent of the index’s climb. Microsoft Corp., Inc. and Intel Corp. rounded out the top four, adding an additional 39 percent, according to data compiled by Bloomberg.

“Tech continued to lead the other ten sectors in October, up 7.8 percent on a total return basis and attributing over 75 percent of the S&P 500’s return last month,” the team, led by quant strategist Savita Subramanian, wrote in a note late Wednesday. “The sector’s 24.5 percent weight in the S&P 500 is now the highest since October 2000.”

Tech Stocks Were More Than 75 Percent of October Market Rally

Of course, not all is rosy in tech land. Facebook Inc. is down more than 2 percent Thursday as the company may face new regulations surrounding political advertising. That kind of uncertainty may explain why the analysts are cautious about how much longer the rally can last.

“Tech has seen strong third quarter earnings results, the best revision trends, and ranks at the top of our quant model,” they wrote, “but extreme positioning by fund managers remains a key risk.”

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