S&P 500 Hits Bear Market Territory

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The S&P 500 Index fell under the 20% threshold to be thought-about a “bear market,” on the shut of buying and selling on June 13, 2022. The index is down by 21.8% from its earlier closing excessive, which it reached on January 3, 2022.

The present bear market is now 161 days previous. The earlier bear market, sparked by the newly unfolding COVID-19 pandemic, ran for 33 days from peak to trough (Feb. 19, 2020 to March 23, 2020), throughout which era the S&P 500 declined by 33.9%. The 2 bear markets previous to that have been a lot lengthier and deeper. From March 24, 2000 to Oct. 9, 2002 (929 days), the S&P 500 dropped by 49.1%, From Oct. 9, 2007 to March 9, 2009 (517 days), it fell by 56.8%.

Key Takeaways

  • The S&P 500 Index ended buying and selling on June 13, 2022 down by 21.8% from its earlier closing excessive, which it reached on Jan. 3.
  • This implies the S&P 500 is now in a bear market, usually outlined as a drop of 20% or extra in a market index.
  • Among the many 11 S&P 500 business sectors, ten are down year-to-date, and 4 of them by 20% or extra.
  • Solely vitality is up, posting a 50.5% year-to-date acquire.

Broad-Based mostly Decline

By means of market shut on June 1, 11 of the S&P 500 sectors are down year-to-date (YTD) down up to now in 2022. The lone exception, vitality, is up by 50.5% for the year-to-date, as fuel and oil costs have risen sharply this 12 months.

4 sectors are down by 20% or extra year-to-date: client discretionary (-33.3%), communication companies (-31.4%), info expertise (-28.5%), and actual property (-24.6%).

The six sectors posting year-to-date declines of lower than 20% are financials (-19.6%), industrials (-17.1%), well being care (-13.9%), supplies (-13.8%), client staples (-9.5%), and utilities (-5.6%).

Largest Shares Down Sharply

The S&P 500 is a capitalization-weighted index. Consequently, simply six shares, issued by 5 firms, collectively account for practically 20.7% of its worth, based mostly on present calculations.

All these shares have posted bigger YTD declines than the S&P 500 as a complete, main the index down. They’re: Apple Inc. (AAPL), down 27.5%; Microsoft Company (MSFT), down 27.6%; Amazon.com Inc. (AMZN); down 39.2%; Alphabet Inc. (GOOGL, GOOG), down 26.6% and 26.3%, respectively;, and Tesla Inc. (TSLA), down 46.1%.

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