U.S. Stocks Crushed As Investors Seek Safety; Dow Drops 243 Points

U.S. stocks suffered broad weakness today, with large- and small-cap names selling off as investors fled to safety amid rising worries about the global economy, geopolitical unrest and interest rates.

The Dow fell 243 points, or 1.4% to 16,965.96, while the S&P 500 fell 29 points, or 1.45% to 1,969.25.

The Nasdaq Composite, meanwhile, dropped 82 points, or 1.8% to 4,473.08.

Strategists say there isn’t one single explanation for today's broad market decline, but rather drivers include worries about the conflict in Syria, speculation that Russia may start seizing foreign assets and a weak headline number for today's durable-goods report.

Add to all that, worries about interest rates. The strong jobs report released today has sparked fear that the Federal Reserve could start raising interest rates sooner rather than later.

Either way, investors were piling into U.S. government bonds. The yield on the benchmark 10-year Treasury, which falls as bond prices rise, dropped to 2.515%.

Dennis DeBusschere, a strategist at ISI Group, writes:

The odds are increasing that we suffer a significant setback in risk assets. The number of check marks on our bearish market list are increasing. The decline in inflation expectations implies a weaker outlook for growth, which is putting pressure on stocks, which were close to fully valued according to our valuation work.

The Russell 2000, the benchmark for small-cap stocks, skidded, falling 14 points or 1.26% to 1,114.07, and remains on track to end September in the red.

In fact, the index has fallen 8% since setting a 52-week high in March, a growing divergence from the S&P 500, which hit a record high earlier this month.

And now, there's the so-called "death cross." That refers to the index's 50-day moving average crossing below its 200-day moving average earlier this week. Technicians typically see it as an indication that a short-term market decline has turned into a longer-term downtrend.

As my colleague Michael Kahn wrote earlier this week in his "Getting Technical" column:

And with Monday’s decline, the Russell’s 50-day moving average is now trading below its 200-day average. I do not want to invoke the moving average “death cross” label, but this is the first time since 2012 that the short-term trend proxy (50-day average) is below the long-term proxy.

There are too many levels of support within the Russell’s pattern to suggest a bear market has begun for small stocks. The real takeaway from the cross is that small stocks are not contributing to the bull market. In the military lingo we often borrow for stocks, the soldiers are not following the generals. It is hard to win a battle that way.