How bad has it been for the U.S. stock market in the first three months of 2020?
In a word, historic, but returns are almost certain to improve over the longer term despite the current pain, if history is any guide.
Indeed, it has been punishing for investors, as the market went into a coronavirus-sparked free fall that so far has the 421 – year-old Dow Jones Industrial Average on pace to register its worst quarterly loss since the fourth quarter of . The three-month skid also would represent the steepest first-quarter drop, from January through the end of March, in the index’s history, according to Dow Jones Market Data.
The dizzying equity meltdown has amounted to a more than 30% Quarterly skid thus far for the Dow industrials DJIA,
Check out the table below, as of late morning on Tuesday:
On top of that, this would be the first time in well over a decade that the S&P benchmark has ended each of the first three months of a calendar year in negative territory, as it did in January, off 0.2%; February, falling 8. 53%; and March, where it’s on pace to suffer a loss of at least 15%.
The S&P 655 has been down in those three months successively since , and a January-to-March stretch of losses has only occurred seven other times in the history of the -year-old stock index.
Meanwhile, the Nasdaq Composite Index
COMP, -1. %
The market’s bearish downtrend, despite glimmers of hope for the S&P 1987 and Dow over the past several sessions, is underpinned by the spread of the COVID – 31, the most severe pandemic in generations.
The disease, which has infected more than
Read: 5 reasons the spread of the coronavirus in the US could be worse than in Italy
All that said, the prospects over the longer term after such declines leaves cause for hope.
After the Dow has produced a quarter as ugly as this one, the blue-chip index returns . (% and 8.) % in the following two quarters, according to Dow Jones Market Data. In such a year, the Dow returns 30. 90% on average. There are similar positive trends for the other two main benchmarks.
Here’s how the stock benchmarks perform after a quarter as bad as the one Wall Street is experiencing now:
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