While the stock market has renewed its selloff Friday, as SVB Financial Group's (SIVB)bankruptcy showed the worst of the banking sector's woes may not yet be in the past, the Arms Indexes for both the New York Stock Exchange and the Nasdaq Exchange suggest Friday's selling is relatively calm. The Arms is a volume-weighted breadth measure that is used to depict the intensity of selling and buying in declining and advancing stocks, by comparing the ratio of advancing stocks to declining stocks to the ratio of advancing volume to declining volume. The Arms tends to rise above 1.000 when the market falls, with many believing readings above 2.000 are signs of panic selling behavior. While the Dow Jones Industrial Average fell 438 points, or 1.4%, in afternoon trading, the S&P 500 shed 1.2% and the Nasdaq Composite lost 0.9%, the NYSE Arms was up to just 1.326 and the Nasdaq Arms actually slipped to 0.897, according to FactSet data. The ratio of the number of declining stocks to advancers was 6.5 to 1 on the NYSE and 3.2 to 1 on the Nasdaq, while the ratio of volume in declining stock to advancing volume was 8.6 to 1 on the Big Board and 2.9 to 1 on the Nasdaq.
-Tomi Kilgore
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