SP500 is on the verge of a bear market
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SP500 is on the verge of a bear market

The S&P 500, on an intraday basis Friday, 20 May, broke through its prior low to reach bear market levels trading more than 20% below its record high reached in January, but it did not close there. Instead, it reversed the day’s steep losses and ended the day just slightly positively. The Nasdaq Composite, which is driven by technology stocks, has been in a bear market since March. Some Wall Street pros consider it a bear market if a 20% decline is reached in an index on an intraday basis, but others insist the index must close at that level for the bear market to be effective. Many investors and analysts see that 20% definition as an overly formal if not outdated metric, arguing that stocks have been behaving in a bear-like fashion for weeks. The S&P 500’s seventh weekly decline marked the longest losing streak since the dot-com bubble burst more than two decades ago.

 

Often a bear market precedes a recession. But a bear market describes a decline of 20% in the value of stocks or other securities from its last peak, while a recession is a general decline in a country’s production of goods and services, measured usually as two consecutive quarters of shrinking growth as determined by the National Bureau of Economic Research. A two-year bull run in stocks that began at the depths of the coronavirus panic came close to crashing into a bear market Friday. Shares are selling off in the hands of investors who are convinced that a recession is all but unavoidable