Panicky behavior was starting to set in on Wall Street on Thursday, at least from a technical perspective, as the Dow industrials shed all of the previous day’s dramatic gains, and then some.
Trading in New York Stock Exchange–listed stocks at midday Thursday exhibited panic-like selling action as bullish investors suffered a powerful reversal of fortune that appeared to be gathering steam in the wake of the Fed’s latest monetary-policy meeting, adding to a bruising stretch for buyers, sparked by concerns about rates.
The NYSE Arms Index, a volume-weighted breadth measure that tracks the ratio of advancing stock to declining stocks over the ratio of advancing volume over declining volume, was showing a reading of 2.588 for NYSE-listed shares. Many technicians say a rise to at least 2.000 suggests panic-like selling behavior.
The reading comes as the Dow Jones Industrial Average DJIA,
The Nasdaq ARMs Index, however, wasn’t showing panic-like selling, with its level at 0.972, at last check.
The downtrend comes after Fed Chairman Jerome Powell on Wednesday said the central bank wasn’t likely to hike its benchmark interest rate by 75 basis points at its next meeting, a comment that immediately sent stocks higher and the dollar momentarily lower. Those trends, however, were reversing course on Thursday.
Market participants point to the continued rise in yields, both on a nominal basis and, a real basis, accounting for inflation, for the market selloff.
The 10-year Treasury note yield TMUBMUSD10Y,
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