Speed Of Selloff Indicates Bear Market Unlikely, Says Strategist

While losses for stocks accelerated with a vengeance last week and another selling storm is on the horizon Monday, the fact that the S&P 500 took its time achieving a 5% pullback from an all-time high indicates stocks aren't likely to slip into a bear market, says Sam Stovall, U.S. equity strategist at S&P Capital IQ, in a note. It took the S&P 500 92 calendar days to achieve a 5% pullback, the longest since World War II, Stovall said noting that there were only two other times it took the index more than 80 days to achieve a 5% pullback, once leading to a total drop of only 6.2% and the other to a fall of 14.8%. "History says, but does not guarantee, however, that the S&P 500 will likely not slip into a new bear market, based on the length of time the S&P 500 took to fall by 5% since the prior market top, combined with the strength of the U.S. housing market and today's low level of inflation," said Stovall. A bear market occurs when stocks fall 20% from their peak.