Losses in U.S. equities are spreading from speculative stocks to the broader market, with the Standard & Poor?s 500 Index down for seven of the last nine days and smaller companies falling 10 percent since March.
Selling was heaviest yesterday in transportation shares such as airlines, pushed lower in part by the first diagnosed case of Ebola in the U.S. Companies in the Russell 2000 Index slipped 1.5 percent, bringing the retreat since March to 10.2 percent, meeting the common definition of a correction.
Uneven economic data and the approaching end of Federal Reserve bond buying have sent the S&P 500 down 3.2 percent from a record Sept. 18, marking the fourth time this year losses in the benchmark gauge exceeded 3 percent. Traders bought options that protect against near-term declines in an exchange-traded fund tied to the Russell 2000, data compiled by Bloomberg show.
?We?ve had such a long run-up the past five years and if you look at small, mid- and even the large-cap stocks, people are taking profit off the table,? Dan Neiman, a fund manager at Williamsville, New York-based Neiman Funds Management LLC, said in a phone interview. ?Whether it?s on interest rates, Ebola concerns and airplanes or an impending retail season, the market?s taking profit.?
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