The U.S. Stock Market Is Officially in a Correction. And Financial Stocks Are Now in a Bear Market
The three major U.S. stock Indexes have all fallen more than 10% from their recent highs, enough to be considered a market correction. And it’s worse for financial stocks, often a market leader: The sector is down 20%, putting it in bear-market territory.
The S&P 500 closed Friday down 1.9% at 2,599.95. The Dow Jones Industrial Average fell a little more than 2% to 24,100.51. And the Nasdaq Composite dropped 2.3% to close the week at 6,910.67. All three are in correction territory, having lost more than 10% during the past three months. That hasn’t happened since March 2016, according to the Wall Street Journal.
Financial stocks, which are seen as a bellwether for other sectors, have fallen harder The S&P 500 Financial Sector Index, which tracks bank and financial services stocks in the S&P 500, closed down 1% Friday at $400.72. That’s 20.2% down from its 2018 high of 501.92 set in late January. When a stock or index falls more than 20% from its high, market participants generally consider it to have entered a bear market.
Among banks, Citigroup declined 1.3% Friday to $55.02 a share, while JPMorgan Chase declined 0.8% to $100.29 a share and Wells Fargo dropped 1% to $46.54 a share. Goldman Sachs fell 1.8% to $172.77 a share, while Morgan Stanley declined $2.4% to $39.64 a share.
U.S. stocks fell Friday after weaker-than-expected economic data from China and Europe added to concerns that the global economy is slowing down. U.S. stocks have been falling since early October on a number of negative factors—not just weaker growth in China, but also a trade war and rising interest rates.