The stock market’s apparent invulnerability came to an end on Friday — ending an 11-day winning streak for the Dow Jones Industrial Average closing higher at the end of the week. That’s representative of just how complacent investors had become, since bidding stocks up ahead of the weekend is a vote of confidence. That’s especially true in the context of all the geopolitical tension in Ukraine, Gaza and elsewhere.
As a result, the Dow index of blue-chip stocks closed below its 20-day moving average in a meaningful way for the first time since May, dropping below the 17,000 level in the process. Small caps suffered more, testing back down to their 200-day moving average.
But it’s the drop in the Dow that will be nagging investors this week as the euphoria that’s held the market up this summer looks set to fade.
Buying demand is narrowing. You can see this in the way measures of market breadth have been compressing: The percentage of NYSE stocks above their 50-day moving average has dropped to around 60% from a peak of more than 83% at the start of July.
Just focusing on the 30 components of the Dow Jones Industrial Average tells the story. A growing number of blue-chip stocks on the list are rolling over. Here’s a look at five that are in trouble: