Once one of the strongest market segments, midcaps are getting hammered today.
The S&P Mid Cap 400 was down 1.5% at 2:30 p.m. today, more than the S&P 500, small caps, the tech-heavy NASDAQ and the Dow Jones Industrial Average. Worse still, the Mid Cap index broke below its 200-day moving average, which means more sellers may come into the market.
Why have midcaps gone from the best of the best to the worst of the worst? After gaining 22.4% during the past 12 months, the sector is looking expensive, with a price-earnings ratio of about 20 times. And they generally get less of their revenues from overseas, a negative for investors considering growth is stronger in emerging markets.
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