1/31/2014 9:08 PM
A look at recent stock market stumbles
By KEN SWEET
NEW YORK (AP) — The bull market that began in March 2009 has endured a few stumbles.
The latest sell-off through Friday brought the Standard & Poor's 500 index down 3.6 percent from an all-time high of 1,848.38 on Jan. 15.
The decline wasn't even close to a correction, a short-term drop of 10 percent or more. The last one took place more than two years ago — during the summer of 2011. Since then, the market has absorbed three significant setbacks.
Here's a rundown of setbacks and slides during the current bull run:
TIME FRAME: June 13-June 24, 2013
HOW BAD WAS IT? The S&P 500 falls 63.27 points in four trading days, or 3.9 percent.
WHY IT HAPPENED: Federal Reserve Chairman Ben Bernanke spooks investors by saying in mid-June that the central bank is preparing to start pulling back on its bond-buying economic stimulus program, if the economy improves enough. The warning from Bernanke is enough to send the Dow Jones industrial average falling more than 500 points in two days. The Fed's bond-buying program helped lift stock prices by making bonds more expensive in comparison.
TIME FRAME: Oct. 17-Nov. 15, 2012
HOW BAD WAS IT? The S&P 500 loses 107.59 points in a month, or roughly 7.4 percent.
WHY IT HAPPENED: Politics and the economy. Wall Street is hit by a batch of bad corporate earnings, which pushes the market lower initially. Also, investors want clarity out of the 2012 Election regarding taxes and the debt ceiling. They get neither. President Obama is re-elected and Republicans keep control of the House of Representatives, guaranteeing that political gridlock will continue for the next two years at least. The S&P falls 2.4 percent the day after the election.
TIME FRAME: April 30-June 1, 2012
HOW BAD WAS IT? The S&P 500 loses 125.31 points over the course of a month, or 8.9 percent.
WHY IT HAPPENED: Just like the stock market correction in 2011, the sell-off starts in Europe and spreads to the U.S. Investors worry about Greece possibly leaving the eurozone. Meanwhile, Spain has trouble with its banks. The S&P 500 comes within one point of being in correction territory, while the Nasdaq composite technically enters into one.
TIME FRAME: July 22-Oct. 3, 2011
HOW BAD WAS IT? This is the market's last correction. The S&P 500 plunges 238.19 points over the course of two-and-a-half months, a decline of 17.8 percent. While severe, it is not enough to be considered a "bear" market, which is a peak-to-trough fall of 20 percent or more.
WHY IT HAPPENED: Investors are hit on two fronts: Europe and Washington D.C. In Europe, the continent's ongoing debt crisis once again becomes front-page news. Greece comes dangerously close to default, requiring a 109 billion euro bailout. In the U.S., President Obama and House Republicans are unable to agree on a debt ceiling, which results in the credit agency Standard & Poor's downgrading the United States' credit rating. The day after the downgrade, the Dow drops 634 points.
TIME FRAME: June 12-July 8, 2010
HOW BAD WAS IT? S&P 500 falls for six days from mid- to late June, then again in the first week of July. It is a total loss of 66.65 points, or 7 percent.
WHY IT HAPPENED: A strengthening dollar disrupts a three-month rally. The market recovers somewhat in late June but gets whacked again on July 2 after the government reports severe job losses and rising unemployment in June.
TIME FRAME: April 23-May 7, 2010
HOW BAD WAS IT? The S&P 500 falls 106.40 points in 10 trading days, or 8.7 percent.
WHY IT HAPPENED: Markets take a skeptical view of Europe's efforts to contain a debt crisis in Greece. Investors fear that a crisis of confidence in Europe's shared currency, the euro, could ripple through the global financial system, much as the meltdown in subprime mortgages did in 2007.
TIME FRAME: Jan. 20-22, 2010
HOW BAD WAS IT? S&P 500 falls 58.47 points in three days, or 5.1 percent.
WHY IT HAPPENED: Stocks start falling after China says it would pull back on bank lending to cool its superheated economy. Then President Barack Obama announces his latest move to crack down on U.S. banks, proposing rules to restrict their trading and prevent further consolidation.
TIME FRAME: Oct. 20-30, 2009
HOW BAD WAS IT? S&P 500 falls 61.72 points over nine trading days, or 5.6 percent.
WHY IT HAPPENED: Stocks falter after reaching their highest level in a year as danger signs emerge on the economy, including a drop in new home sales and weaker consumer spending. The S&P 500 ends down for October, breaking a streak of seven straight months of gains.
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