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Goldman Says Narrow Breadth in S&P 500 a Bad Sign for Stocks

The narrowing group of winners in the S&P 500 doesn’t bode well for the future performance of U.S. stocks, according to Goldman Sachs Group Inc.

The U.S. benchmark is around 17% below its February record, but the median stock trades 28% from its peak, Goldman strategists including David Kostin wrote in a note Friday. Meanwhile, the five largest companies make up 20% of the gauge’s market capitalization, exceeding the 18% level the measure reached in March 2000 and raising investor concerns about narrow market breadth, they said.