Wisconsin Chronicle

Epic bear market preceded aging bull

Epic bear market preceded aging bull

Before lighting a candle on the bull market’s seventh birthday today, how about a quick glance back at what things looked like in 2009? Nobody knew at the time, but that was the day the U.S. stock market’s worst bear market since the Great Depression finally hit bottom.

Compared to this bull market, that bear market was relatively short at less than a year-and-a half. But it’s incredible just how much damage a full-blown financial crisis — one that required federal bailout of the banking system and extraordinary stimulus from the Federal Reserve — can do to stocks in that time.

To put it lightly, things were bleak on March 9, 2009:

• The blue-chip Dow Jones industrial average closed at 6,547 that day. That was 7,617 points below its then-record close on Oct. 9, 2007 — a nearly 54% drop. It also was the Dow’s lowest close since April 14, 1997.

• The benchmark Standard & Poor’s 500 index was doing even worse, down nearly 57% from its October 1997 record and lowest close since Sept. 12, 1996.

•  The Nasdaq composite was down almost 56% from its 2007 peak. That was its lowest close since Oct. 16, 2002, but only because the tech-packed index had yet to recover from the 2000-2001 Internet stock crash.

•  U.S. investors had seen $11.2 trillion in stock wealth vanish since the 2007 top, as measured by the Wilshire 5000 index.

So while celebrating how far it has come, maybe a quick round of applause for what this bull ended.