After a woeful September for optimists, the stock market’s bullish patina is being further chipped away to start October, with at least one main benchmark and a number of sectors perilously close to a correction.
Indeed, the Nasdaq Composite Index
which was down 2.4% on Monday, as social-media company Facebook Inc. tumbled nearly 5% on the session, bringing the technology-laden index about 7.3% from its Sept. 7 record close, according to Dow Jones Market Data.
Market technicians usually define a correction as a drop of at least 10%, but no more than 20%, from a recent peak. An asset is considered in a bear market when it declines by at last 20% from its peak.
The Nasdaq Composite needs to close below 13,836.90 to reach correction territory, according to Dow Jones Market Data. The index last entered correction on March 8, 2021 and it exited correction on April 9, 2021.
On Monday, it finished at 14,255.48, and has been down six of the past seven trading sessions.
a part of for the popular “FAANG” stocks, including Facebook, Netflix Apple and Google-parent Alphabet was down nearly 3% on Monday and 14.5% from its July 8 closing peak. Apple’s stock was down more than 11% from its recent peak and Google’s Class A shares were down 8.4% from a recent high put in early last month.
Facebook also was facing widespread outages at its social-media properties WhatsApp and Instagram, adding to company’s miserable day.
Facebook has come under pressure after data scientist Frances Haugen, alleged that the social-media giant has been deceiving investors about how it has been dealing with hate speech and misinformation on its platform. Haugen is set to testify before Congress on Tuesday.
Here are the other levels to look out for if the market continues to lose altitude, something that it has been known to do in October. The S&P 500 and Dow Jones Industrial Average were about halfway to correction: The S&P 500 is off 5.2% from its Sept. 2 record close, while the Dow is down 4.6% from its Aug. 16 peak.
The market has been under increasing pressure, with developments centered on those in Washington, D.C., where tense negotiations on the debt ceiling are playing out and negotiations on infrastructure spending and social spending have failed to achieve a resolution.
Investors also have been worried about potentially out-of-control inflation and the Federal Reserve’s likely responses to an overheated economy, with crude-oil and natural -gas prices soaring to multiyear highs in recent action.