Technology stocks had been a safe harbor as the economy teetered in the first part of the year, but in the third quarter they shared the pain of other industries. The sector's steadiest performers were dragged down by fears that businesses and consumers will soon spend less.
One of the hardest-hit companies was Internet search leader Googlewhose shares have endured their toughest year since the company went public in 2004.
The quarter was also rough for Apple due to concerns that slowing consumer spending is hurting the PC business, particularly the pricier models that are Apple's specialty.
“The target customer for their products are young people and young people could be out of jobs,” says Fort Pitt Capital portfolio manager Kim Caughey on CNBC. “I don’t know if high school kids are flush with cash and that’s who buys their products.”
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Some tech stocks were bright spots, however.
Hewlett-Packard and IBM have both seen demand for their technology services go up in the ailing market because companies hope it will help them cut costs.
But that's not all. Many companies in technology could provide safe haven trades. “We’re telling our investors to stay with companies that have good cash flows and strong cash positions says Joel Fishbein, managing director at Lazard Capital also on CNBC. We like Citrix Systems, Salesforece.com and CommVault Systems. All of these stocks, he says, are buys right here, right now.
If you’re looking to get long, I’d look at CA Inc. , IBM , and Microsoft, adds Caughey.
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CNBC.com with wires