- February 15, 2019
- Posted by: Trading
- Category: News
The Nasdaq Composite Index, often used as a proxy for the health of technology and internet-related stocks, on Friday was on the verge of ending one of its longest bear market, by one measure, since 1991.
The Nasdaq closed on Friday at 7,472.41, eclipsing by a healthy margin the 7,431.50 for the Nasdaq
need to rise 20% from its recent low on Dec. 24 at 6,192.92. That 20% climb from a bear-market low is a commonly used definition for an exit from bear-market territory.
The Nasdaq entered the corrective phase on Dec. 21, closing more than 20% below its all-time high set on Aug. 29 at 8,109.69, meeting the widely accepted definition for entering a bear market.
After continuing its fall through Christmas Eve, marking its most recent bear-market low, the index has punched higher alongside other major benchmarks. The Nasdaq now stands about 7.9% shy of that August record, after booking eight straight weekly gains, representing the longest string of weekly wins since Aug. 19, 2016, according to FactSet data.
The Nasdaq has gained 12.6% so far in 2019, while the S&P 500 index
has gained 10.7%, and the Dow Jones Industrial Average
has climbed 11%, as of Friday’s finish (The Dow and S&P 500 exited correction territory on Jan. 10, usually defined as a decline of at least 10% from a recent peak. The pair of indexes never fell the requisite 20% to enter bear market.)
The current bear run from its low at 37 trading days, which is the longest such period since a 69-day stretch that ended in January 1991 (see chart below):
From entry to exit, the current bear market would be the longest bear market run since the 218-day bear market in 2008, according to Dow Jones Market Data.
The Nasdaq’s gains have come as major tech and internet-related components, which had helped to jolt the market higher during its lengthy bull-market run, have rebounded after a slump. The so-called FAANG cohort, made up of Facebook Inc.
and Google-parent Alphabet Inc.
are decidedly higher so far this year.
Last year’s weaker performers have so far led the way, with Netflix shares up 33% so far in 2019 and Facebook shares gaining 24% over the same period, producing the sharpest gains among the FAANG stocks.
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