GOLDMAN SACHS DATA SHOWS S&P 500 STOCKS DIVERGING FROM INDEX

Almost half of the companies in the S&P 500 have moved against the broader index in recent months, according to a note from Goldman Sachs. The bank found that around 45% of constituents recorded a negative three-month beta, a measure of a stock's returns relative to the market. A negative reading means a stock moved opposite to the index over the period measured. A separate analysis of weekly returns found a similar pattern: close to 40% of S&P 500 stocks showed a negative three-month beta, and 17% a negative one-year beta.

The pattern has emerged alongside other unusual signals in the market. The S&P 500 rose 1.5% on a recent Monday, yet the same day 30 stocks touched a 52-week low while only seven reached a new high, the analysis found. Jason Goepfert, founder of SentimenTrader, said the index last gained at least 1% while within 1% of a 52-week high, with new lows outnumbering new highs, in December 1999, shortly before the dot-com boom peaked. The two indicators suggest market indexes can remain close to record levels even as individual stocks diverge sharply.

Adam Turnquist, chief technical strategist at LPL Financial, said the divergence largely reflects how concentrated the S&P 500 has become. He said mega-cap technology companies carry outsized weight in the index, so only a few need to perform well for it to rise, even as many smaller-weighted stocks fall. Turnquist pointed to unusually low correlations among S&P 500 stocks as evidence of the pattern. Bradley Krom, director of investing strategy at WisdomTree, said beta reflects correlation and volatility, which explains why the index can appear calm even as individual stocks make large moves.