Can Stock Bulls Fight Back for a Stampede Rally?
Stocks and ETFs fell again on Thursday as fear mounts over sequestration, Fed policy and weak economic reports
Major stock indexes and their related ETFs fell on Thursday with the Dow Jones Industrial Average (NYSEARCA:DIA) posting its second day of losses, along with the s&P 500 (NYSEARCA:SPY) and Nasdaq 100 (NYSEARCA:QQQ)
VIX, the CBOE S&P 500 Volatility Index, also known as the “fear indicator,” jumped again today, up 3.68% to add to yesterday’s 18% gain.Today’s decline brought the S&P 500 (NYSEARCA:SPY) back to a major support level at 1500.
The day’s economic reports were fairly weak with jobless claims rising, the Philadelphia Fed report declining to -12.5, a sharp miss from the expected +1.6, and Markit Flash PMI registering a 55.2, down from last month’s 55.8, and also below forecasts. Leading indicators also weakened with a a 0.2 for January, down from 0.5 in the previous month and 0.3 expected.
Markets have been spooked over the last couple of days by the possibility that the Fed might be ready to curtail its quantitative easing program and also overbought conditions added to recent selling pressure.