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S&P 500 Hits Bear Market Territory

The S&P 500 Index closed trading on June 13, 2022 down 21.8% from the year's high, thus establishing a bear market.

At the close of business on June 13, 2022, the S&P 500 Index slipped below the 20% level that defines a "bear market." The index has dropped 21.8 % from its previous closing high, set on January 3, 2022.

The current bear market has been in place for 161 days. The previous bear market, precipitated by the COVID-19 pandemic, lasted 33 days from peak to trough (February 19, 2020 to March 23, 2020), during which time the S&P 500 fell 33.9 %. Prior to then, there had been two far longer and deeper bad markets. The S&P 500 fell 49.1% from March 24, 2000 to October 9, 2002 (929 days). It dropped 56.8% from October 9, 2007 to March 9, 2009 (517 days).

TAKEAWAYS IMPORTANT

  • The S&P 500 Index closed trading on June 13, 2022, down 21.8 % from its last closing high of January 3.
  • This indicates that the S&P 500 has entered a bear market, which is defined as a decrease of 20% or more in a market index.
  • Ten of the 11 S&P 500 industrial sectors are down year-to-date, with four of them down by 20% or more.
  • Only energy is up, with a year-to-date gain of 50.5 %.
S&P 500 Hits Bear Market Territory
S&P 500 Hits Bear Market Territory

Broad-Based Decline

11 of the S&P 500 sectors are down year-to-date (YTD) in 2022, as of market close on June 1. Energy is the lone exception, with a year-to-date gain of 50.5 %, as gas and oil prices have climbed considerably this year.

Consumer discretionary (-33.3%), communication services (-31.4%), information technology (-28.5%), and real estate (-28.5%) are the four industries that have lost 20% or more year to date (-24.6 % ).

Financials (-19.6 %), industrials (-17.1 %), health care (-13.9 %), materials (-13.8 %), consumer staples (-9.5 %), and utilities are the six sectors with year-to-date losses of less than 20%. (-5.6 % ).

Biggest Stocks Down Sharply

The S&P 500 is a cap-weighted index. As a result, according to current assessments, just six equities issued by five corporations account for over 20.7 % of its total value.

All of these equities have had greater YTD losses than the S&P 500 as a whole, leading the index down. Apple Inc. (AAPL) is down 27.5 %, Microsoft Corporation (MSFT) is down 27.6 %, Amazon.com Inc. (AMZN) is down 39.2 %, Alphabet Inc. (GOOGL, GOOG) is down 26.6 % and Tesla Inc. (TSLA) is down 46.1 %.
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