A funny thing happened on the way to the stock market's first down day in 5 trading days. Most stocks did not go down. If you are like me you have several lists of stocks you watch set up as portfolios on the various financial websites. As the day went along I was noticing that the many of the stocks in my lists were showing substantial gains and stocks with losing days were in the minority. I was very happy with how my holdings ended the day even though all of the U.S. major averages (Dow, S& 500, NASDAQ) ended up in the red.

I was wondering, was I just lucky with the relatively few stocks I watch? Or was this pattern more widespread? A look at the total advances and declines shows that the winners carried the day in raw numbers. On the NYSE there were 2099 advancing stocks vs. only 1,056 decliners, a 2 to 1 advantage. The AMEX had a similar ratio of advancing and declining stocks. The NASDAQ spread was narrower with 1,535 advancers to 1,296 stocks that retreated.

I next wanted to see if some sectors were outperforming. A sector breakdown of the market averages did not point to any particular sectors that would cause the difference between winners and losers for the day. From the WSJ, the Dow Jones U.S. sector breakdown had 3 sectors in positive territory and 6 posting negative returns. The S&P 500 had a similar look with 4 positive and 6 negative sectors. No sector showed out-sized returns and most hovered around break even.

Interesting side note: Under the Dow Jones Industry Sectors the telecommunications sector had a -3.75% return. The subsectors of this sector had the Fixed Line Telecoms down 4.33%, but the Mobile Telecom subsector had a gain of 4.96% for the day.

Still no answer to the question why the overall markets were down when the number of advancing stock significantly outnumbered the losers. Then I took a look at the S&P 500 Equal Weighted Index. Completely different results: Six positive sectors to only 4 negative and a significant swing in returns. Here are some comparison of the sector returns, equal weigh first: Energy: +3.64% vs. +1.36%, Consumer discretionary: +1.29% vs. +0.02%, Financials: -0.55% vs. -3.91%, Telecommunications: -1.64% vs. -3.91%.

This data shows me it was relatively large declines in large cap stocks that brought down the market averages while the majority of stocks had a positive day. A glance at some large cap stocks will bear this out: GE: -2.58%, Wells Fargo (NYSE:WFC): -6.47%, Bank of America (NYSE:BAC): -2.44%, Verizon(NYSE:VZ): -6.24%, AT&T (NYSE:T): -3.37%, Motorola (NYSE:MOT): -4.07%.