How about this for a stock market reversal: On Wednesday, Exxon (xom)—a bellwether for the seeming doomed oil sector—was the only stock in the Dow Jones Industrial Average that was up for the day. Meanwhile, Netflix (nflx), long a darling of Wall Street, dropped just over $10, or a little more than 8.6%.
Overall, the S&P 500 fell 48 points, or 2.5%, and the Nasdaq fell 159 points, or 3.5%. That meant that two of the three major U.S. indexes entered correction territory, officially defined as a 10% drop since the top of the market. The third, the Dow, was almost there, down 9.9% from its peak. One analyst predicted that stocks would have their worst crash in more than a generation.
Of course, the fact that the shares are dropping is nothing new for 2016. What was different Wednesday was which stocks that were falling and rising. All of a sudden, the stocks that have been seen safe havens are dropping as well. And the stocks that had been laggards were not dropping as much. The so-called FANG stocks, which include Facebook (fb), Amazon (amzn), and Google (goog), as well as Netflix, had been some of the best performing stocks last year, but all four were down.
And for the first time in a while, oil stocks as a group were not the worst performing stocks in the market. Overall, oil stocks were down just 1.8%. Another surprise was Chipotle (cmg), whose stock was one of the worst performers in 2015. Shares of the restaurant chain, which has been battered by a number of food safety disasters, rose $24, up 6%, on Wednesday to $428, as the company’s CEO promised investors it would launch an aggressive marketing campaign to get customers back.
The worst performing sector of the S&P 500 on Wednesday was consumer discretionary stocks, which dropped 3.4%. That was also a reversal from recent history, and possibly an ominous sign. Consumer stocks had held up better than most. One of the biggest reasons for that had been the assumptions that low oil prices would put more money in people’s pockets and prompt Americans to spend more.
In fact, the idea that low oil prices would provide an economic boost was one of the main reasons to be optimistic about 2016. But James Bianco, head of Chicago-based investment strategy firm Bianco Research, says there has been little evidence that falling oil costs have had a positive effect on the economy. He thinks that may mean that demand, both here and overseas may be weaker than previously thought. “If the easy call that low oil prices would boost consumer demand was wrong, then the question is what else have we got wrong about the economy,” says Bianco.
So far this year, and even louder on Wednesday, the answer from investors is: a lot.