Stocks Fall, End Worst January In Years
NEW YORK (CNNMoney) Good riddance to a cold January, and we’re not just talking about the weather.
Stocks dropped sharply during the first month of the year, with the Dow tumbling more than 5%. That was the Dow’s worst January since 2009, when stocks were still in freefall in the aftermath of the financial crisis.
The S&P 500 slipped more than 3% this month, while the Nasdaq has shed nearly 2%.
Stocks have been hit particularly hard during the past two weeks due to emerging market worries and weak earnings.
As stocks continued to lose ground, CNNMoney’s Fear & Greed index, which measures seven indicators of market sentiment, fell further into “Extreme Fear” mode.
The market pullback hasn’t been a total surprise though, given how well stocks did in 2013. Many experts believe stocks could continue to drop before resuming their upward trend.
“Frankly, we’ve been telling clients to expect a 5% to 10% decline,” said Matt King, chief investment officer at Bell Investment Advisors. “We didn’t think it would happen so early in the year, but it’s been such a good run for markets that a meaningful correction is normal and healthy.”
While stocks took a small step back last spring, they haven’t experienced a correction, typically defined as a decline of 10% or more, in more than two years.