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Bear Market

Dow closes in a bear market for the first time since 2009

Bear market | CNBC | Alicia Adamszyk | March 11, 2020

A bear market marks a 20% decline in stocks

The Dow closed down over 1,400 points Wednesday, ending its historic bull market run and entering bear market territory as the coronavirus was officially named a pandemic by the World Health Organization. Here’s what you need to know.

A bear market marks a 20% decline in stocks from recent highs and an overall pessimistic feeling on Wall Street. They typically last around 13 months, according to a CNBC analysis.

The U.S. stock market had been in a bull market — or consistently increasing — since March 2009, one of the longest on record. In that time, it’s experienced a number of corrections, or declines of 10% from record highs, before rebounding.

While no one knows what will happen, it’s possible that the coronavirus’s global scale could keep stocks down for a long period of time. Bear markets can go hand-in-hand with recessions, though Federal Reserve Chair Jerome Powell said at the end of February that while the coronavirus poses a risk to the U.S.’s economic activity, he believes the “fundamentals of the U.S. economy remain strong.”

The past week has seen the stock market bouncing up and down a thousand-plus points, leaving investors “feeling like we are all Chicken Little,” Michael Macke, founder and president of Petros Advisory Services, tells CNBC Make It in an email, referring to the story about the chicken who kept incorrectly claiming the sky was falling. “Only after the fact will we know for sure if we have a bear market, or even a recession.”

 

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