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In this Jan. 12, 2017, photo, traders work on the Mizuho Americas trading floor in New York.Mark Lennihan/The Associated Press

With the tech meltdown showing no sign of abating, equity bulls are taking solace in how little money is actually leaving the stock market as a whole.

The trend can be seen in investment flows, where one of the biggest withdrawals from exchange-traded funds tracking technology shares in a year was more than offset by deposits into banks, energy producers and retailers.

On a net basis, investors sent $1.9-billion to ETFs focused on U.S. equities Friday, triple the amount added to international stock funds, and five times the money sent to fixed income, data compiled by Bloomberg show. While tech ETFs experienced withdrawals of about $510-million, financials had inflows of almost $1-billion and energy took in $120-million.

The flows mirrored the share performances. Financial firms in the S&P 500 Index jumped almost 2 per cent Friday, while energy producers rallied 3.7 per cent in two days. That's little consolation if you're long internet megacaps as measured by the Nasdaq 100 Index, currently headed for the biggest two-day drop in a year. But it's evidence that what's driving the rotation isn't monolithic bearishness.

"The fact that the Nasdaq could sell off 2 per cent but leave the broader S&P 500 essentially flat is a good sign that money is not leaving equities, but simply repositioning," said Morgan Stanley strategist Michael J. Wilson. "That is supportive of our view that this is a correction not the end of the bull market."

The divergence continued Monday, as tech shares suffered the biggest losses in the S&P 500, countering gains by telephone, energy and financial companies. The Nasdaq 100 Index dropped 1.2 per cent as of 10:28 a.m. in New York, extending a 2.- per-cent decline.

Investors appear to be exiting winners and buying losers. Before Friday, tech stocks had led the market with year-to-date gains almost three times the broader market's, with banks and energy stocks at the bottom among 11 S&P 500 industry groups.

The same thing happened within industry groups. While Amazon.com Inc.'s biggest slump since February may have contributed to withdrawals of more than $200 million from ETFs that invest in consumer discretionary shares, the SPDR S&P Retail ETF was up 1.4 per cent Friday, attracting $19-million of fresh money.

"The price action was not bearish because financials and energy stocks ripped," said Jeff deGraaf, co-founder and chief analyst with Renaissance Macro Research who has been Institutional Investor's No.1-rated technical analyst for 11 years running. "Had the money flowed into utilities and staples, we'd be more concerned, but this was old fashioned risk-on rotation."

The shift was also clearly a move from growth to value stocks. Companies that offer the highest earnings potential, such as Apple Inc. and Facebook Inc., had been booming this year as economic data trailed economist forecasts. The growth cohort in the S&P 500 Index had beaten value shares, those trading at lower multiples to earnings, by the most since 2009 this year before June.

Small-cap shares, one major laggard that's cited as a cause of concern by many over this year's advance, also staged a comeback. The Russell 2000 Index is poised to beat the S&P 500 for a third straight day after trailing in all but one month this year.

Another stat that favors bulls: an S&P index of asset managers and bank custody stocks rose 1.7 per cent Friday, capping its best three-day advance since February. Shares of Invesco Ltd., the Atlanta-based firm, have fallen once in 11 days. And Berkshire Hathaway Inc.'s 1.9-per-cent advance Friday was its biggest since March 1.

"It's this constant rotation that keeps the bull market intact," Jonathan Krinsky, chief market technician at MKM Partners. "With breadth still healthy, we remain constructive on U.S. equities."

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