While the Dow Jones Industrial Average DJIA, -0.57% and S&P 500 SPX, -0.21% head for a third-straight day of significant gains, the NYSE's Arms Index indicates market internals are exhibiting signs of panic selling, suggesting investors may be looking to sell on the day's rally. The number of stocks trading higher on the big board outnumbered decliners by a ratio of 1.24 to 1, but volume in declining stocks is leading advancers by a 1.77-to-1 ratio. That pushed the Arms Index to 2.195, the highest reading since it reached 2.486 on March 3, when Dow plummeted 786 points, or 2.9% and the S&P 500 plunged 2.8%. The Arms is a volume-weighted breadth measure that tends to rise above 1.000 when stocks sell off. Many market technicians view gains above 2.000 as suggesting panic-like selling, as volume in losing stocks jumps relative to the number of stocks declining. But on Thursday, the Dow is up 146 points, or 0.6%, and the S&P 500 is rallying 0.8%; over the past two days, the Dow had surged 1,083 points and the S&P 500 had run up 2.7%.