What does it mean when stocks enter a 'bear market'

What does it mean when stocks enter a 'bear market'

What does it mean when stocks enter a 'bear market'

Michael Hewson, chief markets analyst at CMC Markets, said: "China is cooling and the eurozone is slowing down, and some of the economic indicators from the USA have been a bit soft recently, but yet the Fed hiked rates and suggested that two more interest rate hikes were lined up for 2019".

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 20, 2018.

-The U.S. dollar ticked higher after two days of sharp losses brought on by fears about the economy and slower increases in interest rates. As of writing, the Dow Jones Industrial Average was up 0.5% on the day while the S&P 500 and the Nasdaq Composite were adding 0.3% and 0.12%, respectively. The NASDAQ Composite briefly dipped into bear market territory on Thursday and is now down almost 20 percent from its recent high.

In addition to the Dow's 1.8 percent drop, the Nasdaq closed down 195 points for a 3 percent drop and the S&P 500 closed down 50 points for a 2.06 percent drop.

Dow Dives to Lowest Point in 2018 After Fed Rate Hike
Dow Dives to Lowest Point in 2018 After Fed Rate Hike

Stocks usually end the year with a flourish, and December is usually the best month of the year for the market. The S&P 500 is on track for its first annual loss in a decade. The S&P 500 also dropped 1.79 percent, while the Nasdaq Composite slipped 1.63 percent to enter bear market territory. The broader S&P 500 index continued its slump, too, and is down 10.6 percent this month alone, with six days of trading to go. When the 10-year yield falls below the two-year yield, investors call it an "inverted yield curve".

Helping stanch the bleeding on Friday was Nike Inc, which jumped 6.2 percent after the company's quarterly results beat Wall Street estimates on strength in North America. Even with the drop since late August, Nasdaq is almost 400 percent above its March 2009 low, with a total return of more than 456 percent.

"We see slowing economic and earnings growth and a carousel of concerns", said Keith Lerner, chief market strategist at SunTrust, in a note to investors Friday. The current bull market has been going on for nearly 10 years. USA crude fell 1 percent to $45.41 a barrel, while Brent fell 1.5 percent to $53.52.

The Dow is down 1,859.62 points, or 7.5 percent. Benchmark U.S. crude fell 4.8 percent to $45.88 a barrel in NY, and it has dropped 40 percent since early October. Silver rose 0.3 percent to $14.87 an ounce and copper, which is considered an indicator of economic growth, fell 0.7 percent to $2.70 a pound. Wholesale gasoline lost 4.6 percent to $1.32 a gallon and heating oil slid 3.1 percent to $1.75 a gallon.


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