NetApp, Staples, SanDisk Hurt Nasdaq 100, S&P 500
In afternoon trade SPDR S&P 500 ( SPY ) was down 0.35% to 143.59. It fell as much as 1.6% in morning trade before rebounding.
PowerShares QQQ ( QQQ ), tracking the 100 largest nonfinancial stocks on the Nasdaq, tumbled 0.61% to 68.34. It dropped as much as 2.4% intraday before paring losses.
SPDR Dow Jones Industrial Average (DIA) slipped 0.2% to 134.07.
"We have been in an uptrend since June and it is tiring," BullAndBearMash.com, which specializes in watching the Dow, Nasdaq and S&P, told clients. "It is much easier to confirm a top than pick a top. We are watching this closely as we expect a top to occur very soon."
All three major ETFs are still trading above their 50-day moving averages after going into the red for five straight days. So far this has to be considered a normal, healthy pullback from new highs. The number of stocks hitting new highs on the NYSE outnumbered those hitting new lows by nearly 5-to-1. On the Nasdaq, that ratio was bout 1.5-to-1. This suggests there's more strength pulling the market up than down, which is bullish.
S&P Capital IQ Strategy
Any dips on fears of global growth slowing or disappointing earnings results should be bought from now through mid-October, Alec Young, global equity strategist at S&P Capital IQ in New York City, wrote in a client note Wednesday.
"Even if the Street bakes in only mid-single digit earnings-per-share growth for Q4 over the next few weeks, we think stocks will rally into the election," Young wrote. "Earnings expectations and stock prices have been negatively correlated since the June low.
"And given widespread year-to-date buy-side underperformance, we wouldn't hold out for a big pullback before committing to the long side," Young added. "November and December total only 17% of the calendar and yet since 1900, 63% of all election-year S&P 500 annual highs have come in those two months; since 1964 it's been higher: 67% (of the time). While past performance is no guarantee, we see 2012 following history's bullish script."
Ned Davis Research also released a bullish outlook based on a study of the leading economic indicators in the world's largest countries that shows global growth is picking up.
"Although the global economy remains fragile, we're beginning to see signs that the worst of the recent economic soft patch could be behind us," Alejandra Grindal, Ned Davis' senior international economist, wrote. "This is supportive of our view of a continuation of the cyclical bull rally in global equities."
NetApp, down 4%, broke below its 50-day moving average in heavy volume. It has been trending lower since February 2011. It hit key price resistance at a 200-day moving average last week after staging a countertrend rally off of a two-year low. There was no other notable news.
SanDisk, off 3%, gapped below its 200-day line, which is very bearish. JMP Securities downgraded the chipmaker to market perform from outperform, citing "weakness in computing trends and supply constraints."
Staples, down 3%, followed through on the prior session's heavy selling after it announced a major plan to cut costs by closing down stores throughout the U.S. and Europe.
Follow Trang Ho on Twitter @TrangHoETFs .