Skip to main content

Another whipsaw session on Wall Street on Wednesday has left investors staring at a market virtually unchanged heading into the final hour of trading. If recent history is a guide, there’s trouble brewing.

Late-day sell-offs have grown common during these bouts of market turmoil. Just Tuesday, the Dow Jones Industrial Average was flat as late as 2:45 p.m. in New York. An hour later, it was off almost 500 points.

“It is always more important where the market finishes,” said Frank Cappelleri, senior equity trader and market technician at Instinet LLC. “In falling markets, the correlation among most stocks is understandably high. The selling can become indiscriminate into the close, which we’ve seen a number of times now over the last few weeks.”

And Wednesday afternoon is setting up to be another make-or-break denouement for equities. Major benchmarks are mixed as of 2:24 p.m., just as they were on Tuesday before a rout in tech shares dragged everything lower.

“Yesterday was a function of tech stocks that couldn’t hold the rally,” Don Townswick, the director of equities at Hartford, Connecticut-based Conning, which manages $121 billion, said by phone. “Yesterday was a broad recovery and it was really the tech sector that turned around and hammered us at the end of the day.”

It’s a similar pattern to last month, as equities tried to find their footing after stumbling into a correction. From Feb. 16 to Feb. 22, U.S. stocks spent their mornings rising only to slip back in the last few hours of the trading day. And before Monday’s rally, the S&P 500 had gone 10 straight sessions, the longest stretch on record, closing below the midpoint of its intraday range.

How bad has it been? Going back to March 16, the final two hours of trading have lopped off 1,200 points from the Dow. The S&P 500 would be down less than 1 percent if the market closed at 2 p.m., compared with its actual drop of more than 5 percent.

Another sign of waning appetite to buy the dip? The Smart Money Flow Index, which looks at the action of the Dow in the first 30 minutes of the day and at the close, shows money managers aren’t stepping in to salvage late day losses. The gauge is hovering at its lowest in more than two years.

Interact with The Globe