(Reuters] – Analysts and investors reacted negatively to a decline in technology stocks. U.S. Treasury yields continued climbing as investors take into account the possibility of higher U.S. Federal Reserve interest rates. [.N]

PETER TUZ PRESIDENT CHASE INVESTMENT COUNSEL, CHARLOTTESVILLE (VIRGINIA):

    “It’s somewhat related to the rise in interest rates we’ve seen since the start of the year. As a result, multiple stocks that have no dividends or earnings are at higher risk.

People are concerned about Omicron’s impact on earnings. Omicron could cause some temporary downturns across the board.

    “People remain concerned about what inflation looks like and how the Fed is going to act to mitigate the situation. It affects all stocks, but it could also impact technology.

    “Technology, especially companies with low or no profits and/or high multiples, get hurt when rates move up sharply because future earnings and what they’re worth today become more suspect.”

LINDSEY BELL, CHIEF MONEY & MARKETS STRATEGIST, ALLY INVEST, CHARLOTTE, NORTH CAROLINA (FROM AN EMAIL)

    “Tech investors get nervous when the Fed starts planning to hike rates, because it means growth won’t be worth as much tomorrow as it is today. History has shown that tech will perform well within the next 12 months. 

Emotions are hot right now. When the rates environment is more understood, cooler heads will prevail. Cash flow management and margins will be easier if the Fed increases rates slowly and steadily. This year, earnings growth will slow to an average rate. Tech is a good place to get reliable, outsized growth in such an environment.

RANDY FREDERICK MANAGING DIRECTOR TRADING AND DERIVATIVES CHARLES SCHWAB AUSTIN TEXAS

Technology isn’t going away. Technology will continue to thrive for the larger, more powerful mega-caps, but it is going to suffer the most for the smaller, less established upstarts, as well.

You have many tech companies in recent years who have become public with a lot more debt than they currently have or have no profits. While they may be able to see brighter prospects in the future, the Fed’s plans to raise rates quickly and people moving away from these names will make them a bit less cautious.

CHRISTOPHER MURPHY, CO-HEAD OF DERIVATIVES STRATEGY, SUSQUEHANNA (FROM A RESEARCH NOTE):

It appears that the trouble in Tech is spreading to other parts of the stock exchange. There is no rotation at the moment, instead we see every sector being liquidated.”