Don’t judge a market solely by its indexes, as most stocks trading on the Nasdaq exchange are rising even though the Nasdaq Composite Index is falling more than the other major market indexes in morning trade Monday. Nasdaq stocks that are gaining ground outnumbered decliners by a score of about 1,558 to 868, according to FactSet, while the Nasdaq Composite was down 0.6%. There were similar divergences last week, when the major market indexes were down but breadth was positive, and eventually the indexes bounced to close higher. Since the technology-friendly index is weighted by market-capitalization, that suggests that on balance, larger-cap Nasdaq stocks are weak relative to smaller-cap stocks. To support that point, the Russell 2000 index of small-cap stocks was running up 0.5%, while the S&P 500 Index of large-cap stocks was down 0.3%.
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