S&P 500 falls for a fourth-straight day

Wall Street’s main indexes fell on Friday, with technology and financial shares among the biggest drags, as investors worried about higher interest rates and the Middle East conflict.

Indeed, the U.S. 10-Year Treasury yield has now hit 5% for the first time since 2007. With this, the S&P 500 and Nasdaq Composite have now fallen four days in a row. The DJI is down three-straight days. Of note, the S&P 500, which hit a low of 4,223.03 before ending at 4,224.16, closed below its rising 200-day moving average, which finished at 4,233.13, for the first time since March 17. That said, there are additional support levels around the 4,200 level, including the index’s early October lows at 4,219.55 and 4,216.45. Under the surface, banks (.SPXBK) were hit hard. The KBW regional banking index (.KRX) lost 3.5%. The AMEX gold bugs index (.HUI) gained about 0.3%. Transports were also a small slice of green. The DJT rose 0.1%. For the week, the DJI gave up 1.6%, the SPX lost 2.4%, and the IXIC slid 3.2%. Spot gold is higher by about 2.5% on the week, while NYMEX crude futures are up 1.2%, but still below a resistance line.


Optimism among individual investors over the short-term outlook for the U.S. stock market pulled back in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, pessimism decreased, while neutral sentiment jumped. Meanwhile, individual investors see revenue and earnings guidance coming out of Q3 conference calls as a key factor.

AAII reported that bullish sentiment, or expectations that stock prices will rise over the next six months, declined 5.9 percentage points to 34.1%. Optimism is below its historical average of 37.5% for the fifth time in six weeks.

Bearish sentiment, or expectations that stock prices will fall over the next six months, dipped 1.9 percentage points to 34.6%. Pessimism is above its historical average of 31.0% for the fifth time in seven weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, jumped 7.8 percentage points to 31.3%. Neutral sentiment is below its historical average of 31.5% for the fourth time in seven weeks.

With these changes, the bull-bear spread fell 4.1 percentage points to –0.55% percentage points from +3.5 percentage points last week. The bull-bear spread remains below its historical average of 6.4% for the sixth time in seven weeks.

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