Hard to Bear

By Connor Smith |  Friday, May 20 Bearing Down. The S&P 500 index was on track to close in bear market territory on Friday. Then came a last-hour rally. Investors were closely watching the 3,837 point mark for the S&P 500 because it represents a 20% decline from the index's recent highs. Finishing below that level would have officially put the S&P 500 in a bear market. Indeed, the S&P 500 crossed that mark this afternoon and traded as low as 3,810.32. But then it surged back in the final hour of trading to close at 3901.36 -- up 0.01% on the day. Market observers use closing levels to track these things, so the bear market was avoided. For now.   The day wasn't without history, though. The Dow Jones Industrial Average finished Friday with an eighth-straight weekly decline. The last time the Dow fell for that long was 1932. The S&P 500 closed down 3.05% on the week, extending its recent losing streak to seven weeks. That's the longest such streak since March 2001 when the market fell for eight-straight weeks, according to Dow Jones Market Data. The Nasdaq Composite fell for its seventh-straight week, matching a streak also set in March 2001. While the the definition of a bear market might seem superficial, the mark carries some historical importance, writes my Review & Preview colleague Nicholas Jasinski. The entry into a bear market has been the pivot point in the past. The S&P 500 has been higher one month later 83% of the time since 1950, according to Dow Jones Market Data, with an average gain of 3.7%. And a year after entering a bear market, returns have been positive 75% of the time—averaging 17%. Maybe investors should be rooting for that bear market after all. There's always next week.

 

DJIA: +0.03% to 31,261.90 S&P 500: +0.01% to 3,901.36 Nasdaq: -0.30% to 11,354.62 The Hot Stock: V.F. Corporation +6.07% The Biggest Loser: Ross Stores -22.5% Best Sector: Health Care +1.2% Worst Sector: Consumer Discretionary -1.7%