Dow falls 300 points | Bull market turns one year old | Valuations too high?

TUE, MAR 23, 2021

EVENING BRIEF

AS OF TUE, MAR 23, 2021 • 04:22 ET

DJIA		32423.15
		-0.94%	-308.05

S&P 500		3910.52
		-0.76%	-30.07

NASDAQ		13227.70
		-1.12%	-149.85

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DOW
NAME	LAST	CHG	%CHG
AAPL	122.54	-0.85	-0.69%
MSFT	237.58	+1.59	+0.67%
INTC	63.48	-2.15	-3.28%

S&P 500
NAME	LAST	CHG	%CHG
AAPL	122.54	-0.85	-0.69%
F	12.21	-0.64	-4.98%
GE	12.66	-0.47	-3.58%

NASDAQ
NAME	LAST	CHG	%CHG
AAPL	122.54	-0.85	-0.69%
AMD	78.38	-1.92	-2.39%
MU	85.40	-5.88	-6.44%

EDITOR'S NOTE

It has been exactly one year since the S&P 500 hit its Covid pandemic bottom and a new bull market emerged. After the fierce first-year rebound, investors should expect a smaller return in year two with a choppier road to get there, based on history.

Tuesday is the one-year anniversary of the coronavirus low after the unprecedented health crisis sent the S&P 500 tumbling 30% in just 22 days in the fastest bear market sell-off ever. The equity benchmark has bounced about 80% from its March bottom, marking the best start to a new bull market on record, data from LPL Financial showed.

History indicates that after big bear market declines, strong bull markets usually follow with gains carrying into a second year. Still, the first year's comeback rally is usually hard to top, while the second year of a new bull market is prone to pullbacks with an average drawdown of 10%, LPL said.

"After an 80% rebound in equity prices since the lows of March 2020, it is fair to suggest that much of the good news is getting priced in and the upside potential becomes more limited from here," Tobias Levkovich, chief U.S. equity strategist at Citi, said in a note.

Wall Street's consensus year-end target for the S&P 500 stands at 4,099, calling for just a 4% gain from here, according to the CNBC Market Strategist Survey that rounds up 15 top strategists' forecasts.

On Tuesday, stocks tied directly to an economic recovery like airlines and cruise operators led the losses amid rising new coronavirus cases abroad and in about half of all U.S. states. The major averages all finished the day in the red on concerns about hiccups in the global economic reopening.