Nasdaq Composite exhibits signs of panic-like buying Thursday morning even as broader stock market trades lower

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Trading in the Nasdaq Composite was exhibiting panic-like-buying behavior Thursday late morning, even as the broader market softened amid concerns about lockdowns during a resurgence of the COVID-19 pandemic. The Nasdaq Composite was up a modest 0.3% at 11,832, while the Nasdaq Arms Index, a volume-weighted breadth measure, fell to 0.291, while many on Wall Street see declines below 0.500 as suggesting panic buying. The Arms Index is calculated by dividing the ratio of the number of advancing stocks over decliners by the ratio of the volume of advancing stocks over declining volume. As the stock market rises, the Arms often falls below 1.000, as the buyers rush into advancing stocks. The current dynamic suggests that investors may continue to adhere to a trend of buying large-capitalization technology-related names as a haven proxy in times of uncertainty. The number of stocks declining on the Nasdaq on Thursday outnumbered advancers by nearly 1.1 to 1, while volume in advancing stocks represented 77% of total volume on the Nasdaq. Meanwhile, the Dow Jones Industrial Average was down 115 points, or 0.4%, at 29,326, while the S&P 500 index was off 0.2% at 3,560. New York City announced the closure of all public schools after the city’s positivity rate from virus tests reached a seven-day average of 3%-the threshold set to keep schools open.

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