Even in ugly stock market selloffs, there are often some reasons to be optimistic the action was overdone.
That wasn't the case on Monday, which should worry the bulls who have clung to the hopes that a selloff in richly valued FAANG (Facebook (FB - Get Report) , Amazon (AMZN - Get Report) , Apple (AAPL - Get Report) , Netflix (NFLX - Get Report) and Alphabet (GOOGL - Get Report) ) stocks is sector specific. The Dow Jones Industrial Average plunged more than 700 points at about 2:10 p.m. EST. The S&P 500 and Nasdaq Composite entered correction, marked by a 10% pullback from their late January highs.
Facebook, Amazon, Apple and Alphabet are holdings in Action Alerts Plus.
There was no one specific factor driving the market lower, just a convergence of events (trade war fears, tech regulation, etc.) weighing even heavily on the minds of already nervous investors. The broad-based carnage by various asset classes suggest the selling may not be finished this week.
Stock market is getting destroyed. Here's why you should be worried https://t.co/EMZHpvDjFP— Brian Sozzi (@BrianSozzi) April 2, 2018
FAANG Stocks Get Rocked
The index, which tracks the performance of names like Amazon and Apple, is now down more than 15% over the past month.
Interest Rate Sensitive Stocks Tank
Homebuilder Toll Brothers (TOL - Get Report) 3.3% drop paced declines in the housing sector. The SPDR S&P Homebuilders ETF (XHB - Get Report) tanked about 3.2%. Meanwhile, the S&P Financials Index dropped 2.9%, touching its lowest level since Feb. 9.
Bitcoin Is Blown Up
So much for the bullish thesis on bitcoin. Bitcoin prices continued to be under pressure Monday after a weekend selloff took the crypto as low as $6,400. The selloff has been fueled by weak technical trading patterns and regulatory fears.
28 of 30 Dow components were in the red on Monday, save for health insurer UnitedHealth (UNH - Get Report) and McDonald's (MCD - Get Report) . The action in the health insurer is hardly encouraging as it likely reflects news that Walmart (WMT - Get Report) may try to buy Humana (HUM - Get Report) .
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