This week, investors are awaiting three critical reports from big technology companies that will give a better indication of how the sector will perform following a tough start to the year.
The S&P 500 technology sector is down about 7 percent year to date. Nearly 50 percent of the index or 32 tech stocks have fallen at least 20 percent from their recent highs, putting them in bear market territory.
Apple is first up
The market gets its first read on the big three when Apple reports earnings on Tuesday after the close of trading. The stock is already down about 20 percent over the past six months, erasing more than $250 billion in market capitalization.
Chief among investors’ worries is concern about slowing iPhone sales growth in the quarters ahead.
Last week, a report by UBS indicated lower demand for iPhone upgrades in developed countries, suggesting shipment levels may be worse than the company initially thought.
Investors will be listening to hear whether CEO Tim Cook still sounds bullish about the business in China, given the Chinese economy’s slowdown.
EBay earnings is Wednesday
Earnings from eBay come in Wednesday. The online retailer and auction place has seen its stock cut in half during the last year.
The focus for investors will be growth in gross merchandise value, total users and profitability. Cantor Fitzgerald analyst Youssef Squali tolds CNBC he remains on the sidelines because his checks suggest eBay will continue to experience muted growth.[related-posts]
Finally, Microsoft reports on Thursday. The company’s stock is up 10 percent in the past year as investors put their faith in CEO Satya Nadella and the cloud computing business he has built.
However, chip giant Intel raised concerns about a weakening PC market when it reported last week. That suggests Microsoft’s flagship Windows software might have suffered a challenging quarter.