Craig Johnson’s

Stock Market Summary

Monday, September 12, 2016

  • Stocks dropped Friday after remaining in a sideways trend since mid-July. For the first time since July, the S&P 500 moved more than 1% in a trading session. The S&P 500’s decline from its recent high to Friday’s low was 3%, while the Russell 2000 declined 3.3%. The Russell 2000’s recent high was set last Wednesday and the low was set on Friday.
  • The selling was blamed on interest rate hike fears, concern over North Korea’s nuclear test and the ten year bond yield climbing back to the highest level since the Brexit vote. The market still had many pockets of extended stocks that the sideways move hadn’t yet consolidated making it susceptible for a pullback.
  • Standard and Poor’s pulled the Real Estate Investment Trusts (REIT’s) out of the Financial sector to become a standalone sector after Friday’s close. The 28 stocks that will be in the real estate sector have a total market capitalization of about $600 billion. It will represent about 3% of the S&P 500, while the financial sector will drop below 12% from the current 13%.
  • Typically, the market tends to hit a short term high in mid-September and sometimes followed by a few rough weeks. Those declines tend to be about 5% in nature if they are short term pullbacks, which this one appears to be. The S&P 500 closed Friday near 2128. Support is at 2116 and 2069.
  • The short, intermediate and long term trends are all higher.  

Sources:,,, Dow Jones News, Financial Times,, Investor's Business Daily,,, Thomson Reuters/First Call, U.S. Dept of Treasury, and individual company web sites and press releases.

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