The Chart: The S&P 500 fell 0.7% on Wednesday, despite a majority of the stocks in the index advancing on the day. Thursday was similar, with the index falling 0.6% but again more stocks were up than down.
By The Numbers: Going back to 1998, there have been 276 single day instances of the index declining on days when more stocks were up than down. That is less than 5% of the time. We’ve seen it for two days in a row only 25 times. 2022 is the first year since 2017 that we have had two in a row more than once in a single year. We’ve only seen three for three (three consecutive index-level declines accompanied by more stocks rising than falling) three times since 1998, with the most recent coming more than twenty years ago.
Why It Matters: Cap-weighted indexes are heavily influenced by the direction of the largest components. But rallies are stronger when more stocks are rising than falling, when more stocks are making new highs than new lows. There is plenty of work still to be done with respect to highs and lows. This week a few large stocks got smaller and a bunch of small stocks got larger. When looking at the market of stocks, that counts as welcome progress.
