The correction continues as we are now reaching extreme oversold conditions; a snap back rally should be expected at any time. Markets started mixed, with the NASDAQ leading as a select group of go to names such as Apple, Google, Baidu, Facebook, Priceline and LinkedIn saw a rotation into them. However breadth was poor even in the morning and as the day wore on more and more stocks went negative. Eventually even the NASDAQ went red and markets finished down across the board. The small cap Russell 2000 was down nearly 1.1% which showed a better picture of what happened today as the larger capitalization indexes such as the S&P 500 and NASDAQ only fell 0.59% and 0.38% respectively. While not rare in normal times, this is the first 4 day losing streak of 2013. Economic news is very light this week with the big event coming Wednesday with the Federal Reserve meeting minutes released, so it was more of the same - higher interest rates on bonds are pressuring equities.
Stocks continued their bounce off the Friday morning lows, and with a late day rally indeed erased all those losses, closing above Thursday's final prices. There was no real news to explain the move, it seems to just be the well ingrained buy the dip mentality. The S&P 500 gained 0.63% and the NASDAQ 0.57%. Small caps continued their third day of outperformance after a horrible start to the previous week, gaining 0.89%. After the bell, Alcoa (AA) kicked off earnings season with a slight beat but other than being the first to start off this period, it usually has little impact. More important names come late this week and the following few.