High-Flying Software Stocks Plunge With Earnings on Deck

(Bloomberg) -- Fast-growing software stocks were among the worst performers in the S&P 500 on Monday as markets fell in the midst of global trade concerns and as a number of tech companies prepare to report earnings. Further dampening the macro outlook: the November ISM manufacturing survey fell from October and undershot Wall Street estimates.

A basket of high-multiple software stocks tracked by Goldman Sachs fell as much as 5.9%, the most since Oct. 18. The benchmark is pulling back after rallying for three consecutive weeks and, despite Monday's losses, remains 46% higher on the year. That compares to a 24% gain in the S&P 500.

MongoDB, Alteryx, Zoom Video Communications, CrowdStrike Holdings and Atlassian were among the stocks that fell about 6% as investors awaited earnings from Coupa Software after the market close Monday. On Tuesday, Salesforce.com, Workday and Zscaler are scheduled to report.

Software Analysts See More Selling on ‘Unsustainable' Valuations

A plunge in the streaming-platform Roku didn't help investor sentiment either. Shares sank as much as 17% after Morgan Stanley downgraded the high-flier to the equivalent of sell and warned that revenue and profits growth could “slow meaningfully” next year.

To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper

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