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(AZN, -3.5%) experimental vaccine, after U.S. health officials said promising trial results might have relied on "outdated information."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).
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.