Historic Bear Markets (MSNBC) - using the past as prologue, what can we expect?

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Fact file 11 historic bear markets


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Introduction


By one common definition, a bear market occurs when stock prices fall for a sustained period, dropping at least 20 percent from their peak. Using the broad S&P 500 as a benchmark, we are in the 11th bear market since World War II.
Here is a look at some notable bear markets of the past 80 years, with the crash of 1929 shown for comparison.

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September 1929 to June 1932


The stock market crash of Oct. 29, 1929, marked the start of the Great Depression and sparked America's most famous bear market. The S&P 500 fell 86 percent in less than three years and did not regain its previous peak until 1954.
S&P 500 high: 31.86
Low: 4.4
Loss: 86.1 percent
Duration: 34 months



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May 1946 to June 1949


Less than a year after the end of World War II, stock prices peaked and began a long slide. As the postwar surge in demand tapered off and Americans poured their money into savings, the economy tipped into a sharp "inventory recession" in 1948.


S&P 500 High: 19.25
Low: 13.55
Loss: 29.6 percent
Duration: 37 months



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December 1961 to June 1962


The economy expanded, but the Bay of Pigs attack of April 1961 and Cuban Missile Crisis of October 1962 sparked Cold War jitters and a brief bear market.


S&P 500 high: 72.64
Low: 52.32
Loss: 28.0 percent
Duration: 6 months


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November 1968 to May 1970


Rapid-fire growth ended with a mild recession, accompanied by relatively high inflation of about 6 percent annually. The bear market began just as Richard Nixon was elected president after a tumltuous year of assassinations and riots. The weak economy added to a tense national atmosphere dominated by the growing U.S. involvement in Vietnam.


S&P 500 high: 108.37
Low: 69.29
S&P 500 loss: 36.1 percent
Duration: 18 months


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January 1973 to October 1974


Israel's Yom Kippur War and the subsequent Arab oil embargo sent energy prices soaring, sparking a lengthy recession. The annual consumer inflation rate topped 10 percent. The Watergate scandal forcing President Nixon to resign.


S&P 500 high: 119.87
Low: 62.28
Loss: 48.0 percent
Duration: 21 months

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November 1980 to August 1982


After nearly a decade of sustained inflation, the Federal Reserve raised interest rates to nearly 20 percent, pushing the economy into recession. The combination of high inflation and slow growth -- known as stagflation -- was a factor behind Ronald Reagan's victory over President Carter in 1980.


Duration: 21 months
High: 140.52
Low: 101.44
S&P 500 loss: 27.8 percent



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August 1987 to December 1987


After a prolonged bull run, computerized "program trading" strategies swamped the market and contributed to the Black Monday crash of Oct. 19. Investors were also nervous after a heated debate between the U.S. and Germany over currency valuations, sparking fears of a devaluation of the dollar. As a result the Dow fell 22.6 percent -- the worst day since the Panic of 1914. Yet while the days after the crash were frightening, by early December the market had bottomed out, and a new bull run had started.


S&P 500 high: 337.89
Low: 221.24
Loss: 33.5 percent
Duration: 3 months

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March 2000 to October 2002


The bursting of the dot-com bubble followed a period of soaring stock prices and exuberant speculation on new Internet companies. Companies with little or no profits had market values that often equaled or exceeded that of established "old-economy" corporate giants. The Nasdaq composite index, which soared in value thanks to the listings of hundreds of tech start-ups, plunged 50 percent in nine months and never again came close to its 2000 peak.


S&P 500 high: 1527.46
Low: 776.76
Loss: 49.1 percent
Duration: 30 months

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October 2007 to present

A long-feared bursting of the housing bubble became a reality beginning in 2007, and the rising mortgage delinquency rate quickly spilled over into the credit market. By 2008, Wall Street giants like Bear Stearns and Lehman Bros. were toppling, and the financial crisis erupted into a full-fledged panic. The selling accelerated in September, with the market off 23 percent in little over five weeks.


S&P 500 high: 1565.15
Low: 752.44, as of Nov. 20
S&P 500 loss: 51.9 percent, so far
Duration: 13+ months, so far


Source: Global Financial Data, MSNBC research.

Updated: 5:42 p.m. ET Nov. 20, 2008

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URL: http://www.msnbc.msn.com/id/27072080?pg=3#Biz_BearMarkets