DESPITE RALLY, BEAR HAS AGRIP ONMANY STOCKS
It’s tempting to get excited about the market’s recent rally. But as impressive as the bounce has been, it is far from repairing some of the worst damage.
There are still 198 companies in the Standard & Poor’s 500, or 40%, mired in bear markets, according to a USA TODAY analysis of data from S& P Global Market Intelligence. A bear market is unofficially defined as a decline of 20% or more from the recent high. The fact so many stocks are still so badly beaten — despite the market’s impressive 9% rally from the lows this year— highlights just howmuch pain remains.
“We’ve had a good rally, but lots of stocks still are down,” says Andy Brooks, trader at T. Rowe Price. “We’re still recovering in many sectors.”
Investors are hopeful the market’s bounce from the Feb. 11 lows this year signals the end of the worst. Roughly $ 1.6 trillion in market value has been restored to the portfolios of investors in the S& P 500, which is a good start, but stocks are still down nearly $ 2.2 trillion from the highs last year.
Given the brutal decline in the price of oil, it’s not surprising to see that many of the most badly damaged stocks are energy firms.
The three stocks still down the most from their highs, all by about 70%, are each energy companies including Southwestern Energy, Chesapeake Energy and Williams. These stocks are still down this much despite some impressive gains from the February lows.
Chesapeake, for instance, is up 189% from Feb. 11, much of that coming in the past three trading sessions after its former CEO died in a car crash a day after being indicted by a federal grand jury.
But it’s not just small energy firms that are still mired in a bear.
Apple shares are down 23.8% from their high.
And Walmart has dropped 20.4% from its high, making it one of the worst stocks owned by Warren Buffett.
“We’ll see these stocks down a lot recover slowly, maybe not all the way back, but we’re definitely making the move higher,” Brooks says.