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The broader market is “very overextended,” according to Morgan Stanley, and value stocks held their ground much better than growth.

Stocks fell Monday after setting records last week. Tech stocks got it the worst.

The Dow Jones Industrial Average fell 89.28 points, or 0.29%, to close at 31,008.69. The S&P 500 fell 25.07 points, or 0.66%, to end at 3,799.61, and the Nasdaq Composite fell 165.54 points, or 1.25% to close at 13,036.43. The biggest gainer on the S&P 500 was Eli Lilly (ticker: LLY) up 12% after releasing optimistic data from a Phase 3 trial of its Alzheimer’s drug.

It was growth and technology stocks leading the way down. As optimism on the trajectory of the U.S. economy—powered by fiscal stimulus and Covid-19 vaccines—is sustained, investors continue to favor economically sensitive value stocks over growth. The Vanguard S&P 500 Growth ETF fell 1.2%, while its value counterpart (VOOV) slipped just 0.02%. The Russell 1000 Growth Index fell 1%.

First off, Twitter (TWTR) stock fell 6.4% after banning President Donald Trump’s account. The President has roughly 88 million followers and analyst Crag Huber at Huber Research Partners tells Barron’s some are assuming roughly 12 million to 15 million daily active users leave the platform. That’s about 6% to 8% of Twitter’s total 187 million daily active users, potentially justifying the stock’s reaction, which doesn’t necessarily account for any changes in profit margins.

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But Twitter doesn’t move the major indexes like Apple (APPL)—worth $2.2 trillion and down 2.3%—does. Twitter’s market capitalization is just $38 billion. The point is that growth stocks across the board were having a rough day and rising interest rates—which is consistent with firming economic and inflation expectations—may be eating into appetite for growth stocks. Higher rates eat into corporate cash flows—more so for growth stocks than for value. The 10-year treasury yield has risen sharply in the past several trading sessions. Still, rates may need to go even higher to before materially affecting stock valuations.

Overall, stock prices are indeed quite extended. Sure, value stocks outperformed Monday, but not spectacularly. About 92% of S&P 500 stocks entered the day trading above their 200-day moving averages, which indicates the market is “very overextended,” according to a note from strategists at Morgan Stanley. Stocks haven’t traded in that territory since 2013, they wrote. Investors have in fact been willing to pay more and more to own stocks as fear of economic uncertainty eases. In that light, Monday’s fall was “profit-taking,” Tim Courtney, chief investment officer at Exencial Wealth Advisors, told Barron’s. “We’re going to start having more days like this as the market has priced itself for everything to work out.” More days like this certainty holds stocks back for the near-term, but Morgan Stanley did point out that at these levels, stocks can still eke out gains for the next several months.

In the grand scheme of things, vaccine-distribution questions are running up against a forward-earnings picture that has already brightened in recent months. Next on investors’ radars: fourth-quarter earnings and guidance, the latter hopefully adjusted higher.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com