Stock market's selloff showing no signs of panic selling

Although the S&P 500 SPX, -0.78% is headed for the biggest one-day drop, and first back-to-back losses, in about a month, selling behavior appears relatively calm, according to stock market breadth indicators. The NYSE’s Arms Index, a volume-weighted breadth indicator, edged up to 1.248, while the Nasdaq Arms slipped to 0.870. The Arms Index tends to rise above 1.000 when the stock market falls, as the ratio of volume in declining stocks over advancing volume tends to increase more than the ratio of the number of declining stocks over advancers. Many technicians believe it takes a rise above 2.000 in the Arms to depict panic-selling behavior. Meanwhile, the Dow Jones Industrial Average DJIA, -0.64% slid 245 points, or 0.8%, the S&P 500 SPX, -0.78% fell 0.9% and the Nasdaq Composite COMP, -1.18% slumped 1.3%. The number of declining stocks outnumbered advancers by 2.29 to 1 on the NYSE and by 2.43 to 1, while declining volume outnumbered advancing volume by 2.86 to 1 on the Big Board and by 2.12 to 1 on the Nasdaq.

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