Tech Stocks the Next Leg of Bull Market?

The market is ringing in the second year of the bull market with a whimper, and that’s just how a value investor likes it.

Stocks have made heady gains since the S&P 500 closed at 676.53 two years ago — a 95% gain. Financials have returned 169% since March 2009, consumer discretionary’s seen a 145% gain, and there have been triple and double-digit gains across key sectors. In such a landscape, it’s a wonder there is a value trade to be had.

But the growth theme is showing some cracks, with tech notable Texas Instruments taking down the Nasdaq today, as is a feeble report from fiber-optic equipment company Finisar.

"With growth subsectors like semis and fiber optics faltering, and the banks getting new attention, we have to ask ourselves: is the rotation to value underway?" Michael Block, Chief Equity Strategist at Phoenix Partners Group wrote in a note to clients. "I watch the ratio of the Russell 1000 Value Index to the Russell 1000 Growth Index, and it looks like it is starting to tell us something," he added. The chart shows a ratio starting to climb after a long decline.

Block is looking at the BKX bank index as a good value bet after Bank of America’s bullish comments at yesterday’s investor day, saying it looks "poised for a comeback."

Fast Money trader Steve Cortes is looking at utilities, with their mere 43.9% gain in the last two years – and seeing low PE’s and technically attractive charts as the sector hits new 2-year highs.

"Charts are looking bullish, and starting to outperform the broad market after months of underperformance," said Cortes, Founder of Veracruz LLC.

Cruz likes Excelon for its 5% dividend yield, and saying the stock, which he owns, looks very attractive.

Another boon to utilities are rising bonds, which will redirect investors looking for yield to dividend-paying stocks.

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Ref: http://www.cnbc.com/id/41991987