But the selloff in the frothiest names in the stock market that caused a 2.6 percent decline in the Nasdaq on Friday alone is what investors will be watching. That was the worst day for the Nasdaq since November, 2011.
"It's a little bit of a warning, but I'm taking it as a late-cycle signal, which would suggest large caps doing a little better than small caps, high-volatility stocks lagging relative to low-volatility stocks," said Andrew Burkly, Oppenheimer Asset Management's head of institutional portfolio strategy.
"All these later-cycle characteristics are creeping into the market. It doesn't mean the end is here. It is just later in the market cycle," he said. "Overall, I'm still pretty constructive. There was a half-hearted breakout in the S&P this week (to new highs). We moved above 1,880 without any real big thrust or catalyst." He expects the S&P 500 to trade in a range between 1,840 and 1,880.
The S&P 500 finished Friday at 1,865, down 1.3 percent, but early in the session it had actually hit a new all-time high of 1,897, a stone's throw from the psychological 1,900 level. It ended the week 0.4 percent higher, and the Dow was up 0.5 for the week at 16,412. The Nasdaq was down 0.7 percent for the week, at 4,127, and it is now down 1.7 percent since the beginning of April.
Stocks like LinkedIn, off 6 percent Friday; Netflix, off 5 percent; and Pandora, down 5 percent have been battered since hitting highs in early March. The IBB Nasdaq Biotech ETF slumped 4 percent Friday, and is off 16.2 percent in the last four weeks. Global X Social Media Index ETF SOCL was off 3.6 percent and down 17 percent in the last several weeks.
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"Who knows what pricked these balloons," said Steve Massocca of Wedbush Securities. He said the overfull IPO pipeline, with high valuations, insider selling in stocks and lofty valuations were all warning signs that the momentum names were setting up for a fall.
"These downdrafts do create changes in sentiment, and these changes in sentiment become broad-based but the broader market will reach proper valuation sooner. It's not that far off," he said. Massocca expects the momentum stocks to bounce back, but he said that probably will not be the last of it and they would probably fall again, possibly harder.
James Paulsen, chief investment strategist at Wells Capital Management, said he thinks the market will stabilize and resume its march to new highs next week. "When it broke the upward tilt in the S&P, most of the S&P held together except for tech," Paulsen said. "My feeling is next week we get some buyers looking at these values that were created by the selloff ... I think it's going to bring in some buyers next week, and we're going to focus on the fact that the economic momentum is still here."
Stocks initially had a neutral reaction to Friday's March jobs report, and stock futures were higher. But the Nasdaq turned lower early in the day, and selling picked up momentum. The 192,000 nonfarm payrolls created in March were slightly below the 200,000 economists expected but way below what traders were expecting in whisper numbers.
"The emerging markets held up very well (Friday). Commodities prices were up. This is not economically driven," said Paulsen. "I just think we're going to find a point next week, where you're going to start attracting some buyers."
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Paulsen said the momentum selloff started amid a market that was concerned with whether there were bubbles building in the hottest names and also about record high margin debt. "Are margin accounts getting out of control? I don't think we're near that but there's enough of that in the air to start a selloff," he said.
Traders, however, are less certain the selloff will stop, and some say if the rotation to older-line stocks stops, the broader market will be hit. Microsoft, which attracted a lot of money recently, fell 2.8 percent Friday.