Featured
In a volatile day of trading, the Nasdaq opened up and briefly climbed to a gain of 0.8 percent, began a steep sell-off that took losses all the way to 1.9 percent by 1 pm, then made a rally in the second half of the trading day to pull back into the black and close at a gain of 0.29 percent.
This whipsaw action also hit the other major indices, though both the Dow Jones Industrial Average (DJIA) and S&P 500 ultimately fell much less and recovered more than the Nasdaq, as investors continue to struggle to make up their minds about the current state of affairs.
It appears as though the markets themselves are currently in a battleground state with the bears and bulls unable to figure out if last week represented a brief correction before a spring boom or the start of a broader decline as tech, biotech, and other growth stocks plummet off of the highs reached in last year’s bull market.
In the meantime, ETF investors, generally used to relatively little price movement, are currently experiencing plenty of volatility as the broader markets continue to shift back and forth.
Risk On, Risk Off?
Among the day’s biggest movers were ETFs and indices tracking growth stocks and other riskier plays. The movement here appears to really reflect a lack of consistency currently roiling the markets.
If the markets are entering a long-term correction, investors are likely going to flee risk-on plays like tech stocks, small-caps, and biotechs. However, if this current downturn is just setting up a spring surge, the sell-off on those same stocks could just be creating a buying opportunity.
And, until more economic data sheds some light on just how much of the recent sluggishishness can be attributed to harsh winter weather, that question appears to be ready to continue hanging over the stock markets. And, without resolution, more volatile trading days could be yet to come.
The trading range on some key ETFs Tuesday would seem to support this contention. The iShares Russell 2000 Growth Index ETF (IWO) , a key ETF for small-cap growth stocks, opened slightly up, was down as much as 2.5 percent by mid-day, and still managed to finish up 0.25 percent for the day.
&&&