From its October peak through mid-March, the Standard & Poor's 500 lost just shy of 20 percent, the traditional threshold for a bear...
From its October peak through mid-March, the Standard & Poor’s 500 lost just shy of 20 percent, the traditional threshold for a bear market.
Stocks are now down about 15 percent from their peak.
Barrington Research Associates analyst Alexander Paris says the market may have bottomed. Investor-sentiment indexes, for example, have reached levels consistent with past troughs, he says.
The market rallied in early April even as several reports seemed to confirm the belief of most economists that a recession has begun, says Paris. This indicates the market’s bearish sentiment has begun to subside.
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“It’s getting difficult to shock investors with more of the same kind of news. There have been signs that the stock market was in the process of building a bottom as the [first] quarter drew to an end.”
Bob Doll, chief investment officer for stocks at BlackRock, says past market bottoms have been marked by failures at major institutions.
The near-collapse of Bear Stearns in March may be followed by a double-digit rally in stocks, just as the blowups at Long-Term Capital Management, Drexel Burnham Lambert, and Kidder, Peabody & Co. were followed by big rallies, Doll says, noting the stock market has “most likely” completed its decline.