On paper, the Dow Jones industrial average tumbled 87 points Wednesday after sliding 31 points on Tuesday.
That's bad enough, but the more discomforting news lies below the surface. On both days, the Dow reversed early-morning gains and ended up selling off heavily in the final 90 minutes of trading.
On Tuesday, the blue-chip index picked up 54 points in the first half hour. It gave that back through the day and was roughly break-even until about 11:30 a.m. Pacific time. It then shed about 55 points in an hour before a wisp of bargain hunting trimmed the loss.
The pattern repeated itself Wednesday. The Dow rose 39 points in the first 30 minutes, but gave back the gain shortly thereafter. It then moved sideways until a late-day downgrade of semiconductor giant Intel provoked renewed selling.
Aside from the price slides themselves, the late-day sell-offs are worrisome because they illustrate the negative sentiment gripping the market these days.
Specifically, they show that some institutional investors feel increasingly edgy. The big players watch trading develop throughout the day. When the market fails to hold its gains, nervous institutions are quick to sell, to lighten their holdings overnight rather than run the risk that the stocks could open lower the next day.
The selling is often done through so-called computerized program trading in which investors unload a basket of securities at once.
To be sure, two days is not a trend. What's more, there have been a number of times in the last few years in which stocks have succumbed to multiple days of late-afternoon selling and yet the bull market has continued intact.
Nevertheless, it's useful for investors to understand the general trading patterns of good and bad markets.
In good markets, ironically, the day can start with selling. Bears unload stocks early on because they think they'll fall later in the day. But on the contrary, bulls swoop in forcefully as the day progresses and the market ends on an up note.
The opposite holds true in weak markets. Because stocks already have been going down, bulls swoop in early, figuring "this is the day the market will pick up." But after their brief buying flurry ends, sellers again take control of the action.
(Note: Each day in its Market Roundup section, The Times includes an hourly chart that plots the Dow's intraday price trend.)