Stock Market Today: Stocks Fall on Anniversary of Bear Market Bottom
Rising short-term COVID concerns, including lockdowns in Europe and a trial-vaccine stumble, pulled down stocks across the board Tuesday.
Stocks marked the one-year anniversary of the COVID bear market's lowest point much the same way they acted on March 23, 2020 – they sold off.
Fortunately, today's declines were milder, and they came amid what's still a vastly more optimistic outlook for stocks, the economy and the public health.
Tuesday's selling, however, was sparked by short-term setbacks on the COVID front: renewed and extended coronavirus lockdowns in Europe, rising domestic caseloads in the U.S., and another setback for AstraZeneca's (AZN, -3.5%) experimental vaccine, after U.S. health officials said promising trial results might have relied on "outdated information." Oil prices were hit particularly hard: U.S. crude futures declined 6.2% to $57.76 per barrel, triggering a 1.5% decline in the energy sector (XLE).
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But the weakness was widespread. The Dow Jones Industrial Average sagged 0.9% to 32,423, the S&P 500 lost 0.8% to 3,910, and the Nasdaq Composite retreated by 1.1% to 13,227. The small-cap Russell 2000 was a little truer to last year's escalated selling, plunging 3.6% to 2,185.
Other action in the stock market today:
- Gold futures closed 0.8% lower to $1,725.10 per ounce.
- Bitcoin prices declined another 1.5% to $55,011. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
The Bull Market: Year Two
The good news, then? Today is also the one-year anniversary of the current bull market, and historically, they do well in their second year.
"Since World War II, there have been six other bear-market declines of at least 30%, and in every single case the S&P 500 was up firmly the first year of a new bull market – with an average return of more than 40%," says Ryan Detrick, chief market strategist for LPL Financial. "The good news is the gains continued in year two, as stocks were also up the second year of a new bull market every single time – up a solid 16.9% on average. Only once (after the 1987 crash) did stocks gain more during year two than year one."
The S&P 500 is up much more than that average, with 75% gains through Tuesday's close. But if you look at the best stocks of the past year – with dozens returning between 300% and 1,000% – you'll see the story of where America has been, and where it's likely going.
Many stocks supporting work-from-home and e-commerce trends are still up massively from their March lows despite cooling off of late … but also, many "recovery" stocks have made the list thanks to red-hot recent runs as investors try to get ahead of the American reopening.
Read on as we take a quick look back at the past year in the markets, including a list of the new bull market's most fruitful stocks.
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Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
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