STOCKS TUMBLE AGAIN: Here's What You Need To Know About The US Market Overnight

UkraineREUTERS/Yevgeny VolokinA man looks at a graffiti produced to support the territorial integrity of Ukraine and to protest Russia’s annexation of the Black Sea peninsula of Crimea in Odessa April 7, 2014.

The selling in the stock market isn’t over yet.

First, the scoreboard:

  • Dow: 16,247.3 (-165.3, -1.0%)
  • S&P 500: 1,845.1 (-19.9, -1.0%)
  • Nasdaq: 4,080.2, (-47.3, -1.1%)

And now the top stories:

  • The Nasdaq composite and the high-beta, momentum stocks were among the underperformers again today. At its lowest level, the Nasdaq was down by 1.8% before recovering some losses.
  • According to Goldman Sachs’ David Kostin, the big hedge funds are among the investors exposed to these losers. “These high growth/high multiple stocks feature prominently on our list of ‘stocks that matter most’ to hedge fund performance,” noted Kostin. “Having outperformed by 230 bp through February, our VIP basket dropped 2% in March while S&P 500 climbed 0.8%. Long positions trail by 98 bp YTD. Short holdings created problems by rising 130 bp more than S&P 500 YTD.”
  • Currently, the S&P 500 is down 2.8% from highs set last week. The Nasdaq is down 6.9% from highs set last month. While this is discomforting, this doesn’t mean we’re at the beginning of a crash. “Corrections are a normal feature of the stock market, and they are healthy for the market,” said Rich Barry in his NYSE MAC Desk Mid-Day Update. “Since we haven’t experienced a correction since late 2012, market-watchers need to be reminded of their frequency.” According to Barry, 5% market corrections happen around three times per year, 10% market corrections happen around once per year, and 20% market corrections happen once every 3.5 years.
  • Consumer credit balances jumped by $16.48 billion in February. Economists expected balances to increase by $14.0 billion. January’s increase was revised up to $13.79 billion from a previous estimate of $13.69 billion. Non-revolving credit, like student and auto loans, jumped by $18.9 billion. Revolving credit, which includes credit cards, fell by $2.4 billion. “This is the largest m/m increase in nonrevolving credit since last February ($21.5bn),” noted Barclays’ Cooper Howes. “Nonrevolving consumer credit held by the federal government, which consists of federal student loans, rose by $14.3bn according to our seasonal adjustments (NSA: $6.2bn) and has been responsible for most of the growth in consumer credit since the end of the most recent recession … We expect the trends of a student loan-driven surge in nonrevolving credit and tepid growth in revolving credit to continue.”
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