The stock market's tumble Thursday is leading to panic-like selling in NYSE stocks, according the Arms Index, which is a volume-weighted measure of market breadth used to gauge the intensity of buying and selling.
The Arms, which tends to rise above 1.000 when the broader market falls, has climbed to 2.086 in afternoon trade. Many technicians view rises above 2.000 as exhibiting panic-like characteristics.
The number of advancing stocks outnumbered decliners 2,119 to 765, a about 2.77 to 1, while volume in declining stocks outpaced advancing volume 394.70 million shares to 68.30 million shares, or about 5.78 to 1. Meanwhile, the Dow Jones Industrial Average tumbled 492 points, or 2.0%, and the S&P 500 dropped 1.7%. The NYSE's Arms closed above 2.000 three times this year, at 3.59 on Feb. 5 when the Dow fell 1,175 points, at 2.17 on Feb. 21 when the Dow dropped 167 points and at 2.26 on Feb. 27 when the Dow shed 299 points. Panic-like selling doesn't always precede a bounce, however, as the Dow rose 567 points on Feb. 6 and gained 165 points on Feb. 22, but lost 381 points on Feb. 28.