Rout Interrupted

By Brian Hershberg | Thursday, August 19

Ups and Down. After opening sharply lower for the third consecutive trading session, U.S. stocks closed mixed as investors continued to digest a swirl of macroeconomic and corporate news—from the Federal Reserve's plans to taper its monthly bond-buying program and rising Covid cases to Amazon.com's reported plans to enter the department-store business and the government's latest antitrust suit against Facebook.

The Dow Jones Industrial Average, after being down about 270 points, rallied to close just 67 points lower, or 0.2%. The S&P 500 reversed its early losses to end up 0.1%. The Nasdaq Composite, also ended up 0.1%.

Still, Barron's reporters Jacob Shonenshine and Jack Denton note that stock market on Thursday was signaling concern about the economy:

About 56% of S&P 500 stocks were down, according to FactSet. Value stocks, the earnings of which are more sensitive to changes in demand, were below the major indexes.

The Russell 2000, an index of smaller capitalization companies with earnings fairly sensitive to changes in the economy, fell 1.25%.

And Barron's Ben Levisohn notes that the market has been due for a correction, if you listen to the thrum of the Street (and take stock in this interesting factoid):

The S&P 500 has been more than 8% above its 200-day moving average for 198 days, the longest in 40 years and among the five longest stretches in history. These streaks are usually followed by a couple of months of choppy trading, with a median gain of just 0.3% over the following two months.

For now that streak continues, but it remains to be seen whether bulls can keep the rally going or if Thursday was simply a day of rest for the leery. 

DJIA: -0.19% to 34,894.12
S&P 500: +0.13% to 4,405.80
Nasdaq: +0.11% to 14,541.79

The Hot Stock: Bath & Body Works +10.5%
The Biggest Loser: Illumina -7.9%

Best Sector: Information Technology +1.0%
Worst Sector: Energy -2.6%