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The worst could be ahead for tech, portfolio manager warns

Following a day in which stocks slipped sharply in afternoon trading, led down by the tech sector, here's what S&P Global portfolio manager Erin Gibbs will be watching on Wednesday.

1. Tech Giants

Tuesday was a tough one for tech stocks, as the S&P 500 information technology sector slid 1.67 percent to close at the lowest level in more than a month. As this follows a dour Monday for the group, the sector is set to have its worst week of the year.

The bulk of the losses came in the afternoon, but tech investors got bad news in the morning, when the European Commission announced a $2.7 billion antitrust fine against Alphabet unit Google. While a large number, it is a manageable one for Alphabet, which reported holding $92.4 billion in cash (including cash equivalents and marketable securities) as of their most recent quarterly filing.

Still, it could foretell worse things ahead for big tech companies in general, Gibbs said Monday on CNBC's "Trading Nation."

"While Google may be easily able to afford the $2.7 billion fine, the ruling could raise concerns on future EU antitrust fines and how large tech firms may have to change their business practices, making them less competitive," Gibbs said.

2. Pending Home Sales

Tomorrow morning after the market open, the National Association of Realtors is set to release the May number for the pending home sales index.

The "pending" in the name of this index, incidentally, refers to the sales rather than to the homes; the indicator measures the number of signed home sales contracts. It is thus meant to serve as a leading indicator for existing home sales.

"I'll be looking to see if the spring slump in pending home sales continues for May," Gibbs said.

The pending home sales index fell by 1.3 percent in April; economists are looking for a 0.5 percent rise in the May number.

3. Value vs. Growth

With tech stocks tanking, the "growth stocks" part of the market has ceded ground against the underperforming "value stocks."

Going forward, "I'll be looking to see if investors keep moving money into value," Gibbs said. "Value is playing catch-up to growth for most of June, but there was a drop-off last week. We'll see if value resumes leadership."

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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