Nasdaq Composite’s surge to another record comes with panic-like buying

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Investors are exhibiting panic-like behavior as they push the Nasdaq Composite up 0.5% in midday trading, to put the technology friendly index toward a seventh straight gain, and sixth straight record close. The Nasdaq Arms Index, a volume-weighted breadth measure, fell to 0.488, while many on Wall Street see declines below 0.500 as suggesting panic buying. The Arms Index is calculated by dividing the ratio of the number of advancing stocks over decliners by the ratio of the volume of advancing stocks over declining volume. As the stock market rises, the Arms often falls below 1.000, as the buyers rush into advancing stocks. The number of stocks advancing on the Nasdaq outnumbered decliners by just 1.32 to 1, while volume in advancing stocks topped down volume by a much more robust 2.70 to 1. The last time the Nasdaq Arms closed below 0.500 was June 4, when the index soared 2.7% the day after falling to a 4-month low. Meanwhile, the NYSE Arms Index slipped to 0.705, and the S&P 500 rose 0.4% and the Dow Jones Industrial Average gained 111 points, or 0.4%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.