Nasdaq plunges while Dow hits new high, Bank of America: breadth of US stock market rally improving, positive signal!
Bank of America pointed out that the breadth of the US stock market's rise is improving, which is a positive signal. The S&P 500 and Dow Jones Industrial Average hit historic closing highs on Tuesday, while the Russell 2000 Index has risen for five consecutive days. Bank of America's research report indicates that the advance-decline line has reached a new high, confirming the summer rally. The S&P 500 Index has risen more than 17% this year, climbing 2.6% so far this month. The Nasdaq Composite Index plummeted by 2.77%, while the blue-chip Dow Jones Industrial Average rose by 0.59%
According to the Zhitong Finance and Economics APP, Bank of America pointed out that the breadth of the rise in the US stock market is improving, which is a positive signal.
Small-cap stocks have risen significantly in the past week, while the S&P 500 Index and the Dow Jones Industrial Average set new record closing highs on Tuesday. According to Dow Jones market data, the Russell 2000 Index closed at its highest level since January 2022 on Tuesday, rising for five consecutive days.
Stephen Suttmeier, a technical research strategist at Bank of America, stated in a research report on July 16 that "the summer rally of 2024 is becoming healthier."
According to FactSet data, as of Wednesday, the S&P 500 Index has risen by over 17% this year, climbing 2.6% so far this month. The index has a significant exposure to large-cap tech stocks, and the substantial gains of companies like Nvidia, Meta Platforms (parent company of Facebook), and Alphabet Inc. (parent company of Google) have driven its rise in 2024.
Meanwhile, the advance-decline line of the S&P 500 Index has reached a "new high around 5600 points to confirm the summer rally," Suttmeier stated. The advance-decline line is an indicator of market breadth, considering the number of advancing and declining stocks.
According to FactSet data, the US stock market fell on Wednesday, with the S&P 500 Index dropping by 1.39%. The tech-heavy Nasdaq Composite Index, after setting a new record closing high on July 10, plummeted by 2.77% on Wednesday, while the blue-chip Dow Jones Industrial Average rose by 0.59%. The Russell 2000 Index fell by 1.06%, ending its five-day winning streak. The index surged by 11.5% in the five trading days leading up to Tuesday, and as of Wednesday, it has risen by 11.1% year-to-date