Falling market tide 'lowering all boats'

Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters
Traders work on the floor of the New York Stock Exchange.

A sharp selloff in the market last week sent investors scrambling for a place to hide; unfortunately, there wasn't any.

By the close on Friday, the Dow and Nasdaq entered correction territory, down about 10 percent from their 52-week highs. Similarly, the average stock in the Russell 1000 index was down 5 percent for the week, on average.

Meanwhile, ahead of the market open Monday, U.S. stock index futures sold off sharply with the Dow briefly plunging more than 800 points.

The main reason for concern, according to market watchers, is the broad dispersion of the losses.

"This pullback can be described as a 'falling tide lowers all boats,' " wrote Bespoke Investment Group in a note to clients last week.

In the past month, the S&P 500 dropped 5 percent while other major benchmarks such as the Nasdaq 100 and Dow industrials plunged 7.5 percent or more.

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