According to a report rom the Wall Street Journal,bargain hunters aren’t pouncing on the latest pullback in U.S. stocks. At least not yet.
Stocks opened broadly lower on Friday, with the Dow Jones Industrial Average off by more than 100 points. The decline comes after the blue-chip average slumped 176 points on Thursday, its second-biggest drop of the month.
Significant volatility in emerging-market stocks and currencies spread into other asset classes, with stocks across the globe falling broadly in Friday’s trading.
The S&P 500 fell 0.7% to 1815, as nine of the index’s 10 large-cap sectors traded in the red.
Even with stocks on pace for the fourth straight day of declines, one market watcher expects more pain ahead. Chris Verrone, head of technical analysis at Strategas Research Partners in New York, noted 27% of S&P 500 stocks traded at their 20-day lows on Thursday, a level that has been rising in recent weeks but doesn’t yet signal the market has hit a short-term bottom.
“We look to the 50% threshold as more consistent with an oversold signal,” Mr. Verrone says. The market is “not there yet.”
The rest of the first quarter will likely “remain on the choppier side,” he said, as the rout in emerging markets unfolds, earnings season continues and the Federal Reserve’s tapering plans develop.
