Updated from 4:06 p.m. EDTA look at the half-dozen or so biggest percentage losers on the Nasdaq 100 Monday shows that today's rout is largely a matter of recent success punished. Contract electronics manufacturer Sanmina ( SANM) was the index's biggest loser, falling more than 6% to $6.12 after RBC Capital Markets downgraded the shares and Deutsch Bank made negative comments about its sector. Sanmina's shares have nearly doubled since March 11 and trade miles above their 52-week low of $1.52. "We believe this rally is based on optimism about improving end markets, and the associated operating leverage investors expect out of the EMS model," Deutsch analyst Chris Whitmore wrote. "As we've expressed extensively in past research, we don't believe this rally in EMS shares is warranted or sustainable." Next worst was Citrix ( CTXS), the application services provider, down $1.11, or 5.24%, to $20.01. The company is also a doubler since its March nadir of $11.09, though it edged off its peak last week. Steve Galbraith, an analyst at Morgan Stanley, issued a report Monday advising investors to back off tech stocks in favor of consumer staples. He changed his sector rating in technology to underweight. "Our move to overweight on staples and underweight on technology is a clear case of selling what has worked recently and buying what has not," he wrote in the report. "Technology is the best performing sector year-to-date, outperforming the S&P 500 by more than 800 basis points, while staples has underperformed the S&P by 1100 basis points. Given the rally, we believe the tech sector is discounting a significant amount of good news." JDS Uniphase ( JDSU) fell 22 cents, or 5.7%, to $3.21. The company is up about 35% from a March low of $2.76 and had nearly doubled off the $1.66 at which it wallowed on Oct. 3, 2002. "As I look at the tape, it's really too early to tell if this is a trend related to tech, or if this is just some noise that goes along with some nervousness before the Fed's meeting and option-expirations and so forth," said Mace Blicksilver, a managing director at Marblehead Asset Management. "The Nasdaq has been great so far this year, and I think portfolio managers really can't show themselves to be underinvested right now, so I think it's probably just the same old noise." Millennium Pharmaceuticals ( MLNM), having skyrocketed 109% since February, fell 5.39%, or 81 cents, to $14.24. "Investors have some concerns about whether sales forecast for (cardiovascular therapy) Integrilin and the guidance overall for the quarter will stay the same," said Jonathan Aschoff, a senior reserach analsyt at Maxim Group. "Also, there is some speculation about whether or not they will sign a marketing partner for Velcade (a myeloma treatment) on time. Originally, they said they would ink a deal in the first quarter, then they said they would have something by the end of the first half. That date is rapidly approaching." Ericsson ( ERICY) fell 5.18% on Monday after climbing over 74% since February.
Ericsson's new CEO was quoted in a European newspaper saying telecommunications firms must prepare for far lower growth than they'd been used to in the 1990s. Richard Bernstein, the chief quantitiative strategist at Merril Lynch, issued a report Monday that takes a bearish look on the recent rally. "We have been concerned that earnings expectations for the second half of the year are too optimistic," he writes in the report. "One of our most reliable profits indicators now clearly suggests that second-half earnings will be weaker than currently expected." The Nasdaq 100 is still up over 24% over its low point of 958.82 on March 11.