Volatility is back in the stock market.
The S&P 500 was off 1.2% at midday Monday. A loss of that size would break a streak of 70 consecutive sessions, dating to October, in which the index hasn’t closed up or down more than 1%.
A stretch of tranquility that long is rare. The current streak is the longest period without a 1% move since the 74 trading days ending Oct. 9, 2018, according to research from Dow Jones Markets Data. It currently ranks as the fifth-longest stretch since 1969.
The rapid spread of the coronavirus over the past week has shattered the market’s calm.
“This is an important one,” said Frank Cappelleri, executive director at brokerage Instinet, of the streak. “It’s been on a lot of radar screens.”
What’s notable about the streak, he said, isn’t just that the market hadn’t fallen by more than 1%. The lack of 1% gains is just as notable, because the two together showed just how quiet the market has been. Monday’s selloff could, he said, be the proverbial floodgates opening, the end of that easy market, especially coming on the heels of last week’s selling.
“Emotion is back and you’re probably going to see that on both sides of the tape until a new pattern develops,” he said.
The Cboe Volatility Index, or VIX, which measures expected moves in the S&P 500 index, climbed on Monday to its highest level since the start of this year.
The selling was widespread, with every sector in the S&P 500 falling, but some stocks, such as airlines, resort operators and other travel-related companies, were hit worse than others.
Shares of Las Vegas Sands Corp., LVS -5.57% which operates a casino and hotel in Macau, the semiautonomous Chinese city, slid 6%. The U.S. Global Jets ETF, which tracks the performance of the global airline industry, lost 3.1%, while Norwegian Cruise Line Holdings Ltd. NCLH -2.81% fell 2.9%. Shares of energy companies are also sliding, pressured by falling oil prices. Marathon Petroleum MPC -2.77% fell 2.5%.
Another streak that could be broken with Monday’s selloff: The S&P 500 is on track to post back-to-back declines for the first time since Dec. 10. The 29-trading-day streak without consecutive declines through Thursday is the longest such stretch since mid-November, according to Dow Jones Market Data.
The virus’s impact on the global economy is still difficult to predict, leading many investors to ask: Why are people so quick to sell?
“The one trend that’s undefeated is human nature,” Mr. Cappelleri said. “It’s as much about that as any data point.”
Write to Paul Vigna at [email protected]
The post Stocks Are on Course for Biggest Move Since October appeared first on WSJ.