Bear Market 2000 – 2002 – Overview
On 03/24/2000, the broad US stock market index S&P 500 reached a high of 1552.87 index points at US market close before declining to a low of 768.63 points on 10/10/2002. The S&P 500 index lost 50.50% during this bear market.
In spring 2003, the low was tested once again, and the bear market came to an end.
S&P 500 is a registered trademark of Standard & Poor’s Financial Services LLC.
Some Possible Reasons for the Bear Market 2000 – 2002
- Greed or so-called “Irrational Exuberance” – copyright by Alan Greenspan, who used this expression in the course of his speech “The Challenge of Central Banking in a Democratic Society” at the Annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research, Washington, D.C. on 5th of December 1996:
“But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?“
- Significant deteriorating “market breadth”, such as the advance-decline-line, because of non-confirmation of new all-time highs of stock index
- Rapidly declining dividend yield
- High price/earnings ratio (P/E)
Bear market 2000 – Key Market Indicators
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