STOCKS TUMBLE AGAIN: Here's What You Need To Know

The selling in the stock market isn't over yet.

First, the scoreboard:

• Dow: 16,247.3 (-165.3, -1.0%)
• S&P 500: 1,845.1 (-19.9, -1.0%)
• Nasdaq: 4,080.2, (-47.3, -1.1%)

And now the top stories:

• The Nasdaq composite and the high-beta, momentum stocks were among the underperformers again today. At its lowest level, the Nasdaq was down by 1.8% before recovering some losses.
• According to Goldman Sachs' David Kostin, the big hedge funds are among the investors exposed to these losers. "These high growth/high multiple stocks feature prominently on our list of "stocks that matter most" to hedge fund performance," noted Kostin. "Having outperformed by 230 bp through February, our VIP basket dropped 2% in March while S&P 500 climbed 0.8%. Long positions trail by 98 bp YTD. Short holdings created problems by rising 130 bp more than S&P 500 YTD."
• Currently, the S&P 500 is down 2.8% from highs set last week. The Nasdaq is down 6.9% from highs set last month. While this is discomforting, this doesn't mean we're at the beginning of a crash. "Corrections are a normal feature of the stock market, and they are healthy for the market," said Rich Barry in his NYSE MAC Desk Mid-Day Update. "Since we haven't experienced a correction since late 2012, market-watchers need to be reminded of their frequency." According to Barry, 5% market corrections happen around three times per year, 10% market corrections happen around once per year, and 20% market corrections happen once every 3.5 years.
• Consumer credit balances jumped by $16.48 billion in February. Economists expected balances to increase by $14.0 billion. January's increase was revised up to $13.79 billion from a previous estimate of $13.69 billion. Non-revolving credit, like student and auto loans, jumped by $18.9 billion. Revolving credit, which includes credit cards, fell by $2.4 billion. "This is the largest m/m increase in nonrevolving credit since last February ($21.5bn)," noted Barclays' Cooper Howes. "Nonrevolving consumer credit held by the federal government, which consists of federal student loans, rose by $14.3bn according to our seasonal adjustments (NSA: $6.2bn) and has been responsible for most of the growth in consumer credit since the end of the most recent recession... We expect the trends of a student loan-driven surge in nonrevolving credit and tepid growth in revolving credit to continue."
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