S&P 500 gains 2% as more stocks hit new lows than highs
by@CNBC
Summary
On Monday, the stock market experienced significant gains, with the Nasdaq Composite rising 2% to a new record and the S&P 500 increasing approximately 1.5%, approaching a fresh high. However, an alarming trend emerged, as the number of stocks reaching new 52-week lows outpaced those hitting new highs, marking the first occurrence of this since December 21, 1999, prior to the Dotcom Bubble. Specifically, 30 S&P 500 stocks hit new lows compared to just seven achieving new highs. Market strategist Art Hogan indicated that this pattern could continue if geopolitical tensions, particularly in the Middle East, and high energy prices persist, alongside the Federal Reserve's ongoing rate hikes.
Tokens
$SPY$IXIC
Analysis
S&P 500: The S&P 500 is a major benchmark stock market index tracking the performance of 500 large companies listed on US exchanges across various sectors. It is relevant to the news as the index advanced significantly on the reported trading day while displaying concerning internal breadth metrics that echo historical periods of market stress. Commentary in the report links its gains to concentrated sector leadership amid broader challenges. Art Hogan: Art Hogan is chief market strategist at B. Riley Wealth, providing analysis on equity market dynamics and sector performance. He is relevant to the news for explaining how concentrated leadership in certain sectors has facilitated new lows and for highlighting potential ongoing impacts from Middle East tensions and monetary policy on future market advances. Jason Goepfert: Jason Goepfert founded SentimenTrader and now serves as an adviser at NextGen News, specializing in market sentiment and historical analysis. He is relevant to the news for identifying the specific trading pattern of index gains paired with more new lows than highs, noting its last occurrences in 1999 and 1929 based on his review of market data. Nasdaq Composite: The Nasdaq Composite is a major stock market index that includes thousands of companies listed on the Nasdaq exchange, with a heavy emphasis on technology and growth-oriented firms. It is relevant to the news as the index reached a new record high in the session discussed, contributing to the overall positive surface-level performance despite the noted underlying issues. Market Breadth: Market technicians have pointed to divergences between index-level advances and the number of stocks reaching new highs versus lows as indicators of uneven participation in recent sessions. Sector Leadership: Gains in communication services, information technology, and consumer discretionary have driven recent index movements while other areas lag their peaks. Geopolitical and Policy Factors: Ongoing Middle East tensions, elevated energy prices, and the Federal Reserve's rate path are cited as elements that could sustain similar mixed trading patterns in coming months.
Categories
macropolitics