ULTI Price Chart

ULTI Price data by YCharts.

What: Shares of Ultimate Software (ULTI) closed 10% lower on Friday. The maker of software tools for managing human resources of all sizes had no news of its own, but was dragged along a negative tide that started with fellow business software expert Tableau Software (NYSE: DATA). Tableau plunged nearly 50% lower due to a mildly disappointing Q4 report that pointed to a weaker overall market in North American software sales.

So what: I can sort of understand human resources specialist salesforce.com (CRM -1.59%) taking a hit on Tableau's market commentary, since that human resources expert won't report its own results until Feb. 24. There's some wiggle room there for jangly investor nerves.

But Ultimate Software and Manhattan Associates (MANH 0.88%) got their own reports for the same quarter out of the way on Tuesday night. Both of these reports were strong, both stocks rose more than 5% the next day, and there were no rumblings about weak long-term sales trends in these business updates. In fact, Ultimate Software raised its next-year guidance targets based on healthy market trends with strong visibility.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

So there's no reason to take Tableau's market-rattling market view as gospel over Manhattan's or Ultimate's very own reports and management analysis. Yet, both of these stocks followed Tableau and Salesforce more than 10% down on Friday.

Some market moves based on cross-sector information make sense. Manhattan and Ultimate Software had no business plunging 10% on Friday. None at all.

Now what: It's worth pointing out that Salesforce, Manhattan, and Ultimate have all outperformed the S&P 500 index over the last year -- by large margins in the latter two cases, including the damage that was done on Friday. It's also true that they all boast nosebleed valuations, with forward P/E ratios starting at 25 and essentially double-digit price to book ratios all around.

So it's understandable that investors in this group may wear their nerves on their sleeves sometimes, ready to jump to conclusions and take the safe bet at the first hint of trouble.

That's just life in the fast lane.