Stocks Slide As Market Watches for Bears

thebalancemoney.com:

It’s been a rough year so far for stocks. The S&P 500 is off to its worst start since 1970 and its third-worst ever, falling briefly into a bear market last week, and the picture gets more grim depending on which way you turn.

The index, which measures a broad array of companies in different industries, was down nearly 18% from its recent peak, just shy of the 20% decline that defines a bear market. Many individual stocks are deep in bear territory already, though. Major retailer Target fell 25% in one day when it announced disappointing earnings, and social media company Snap cratered by 43% Tuesday after reporting similar results. The tech-heavy Nasdaq is in a severe downturn as well, off nearly 30% Tuesday from its Nov. 19 high of 16,057.44.

The Dow Jones Industrial Average of large, blue chip companies has fared a little better, but it, too, is down significantly–more than 13% since its peak, which means it’s in a correction (which is defined as being down at least 10%). 

Stocks are being battered for a number of reasons.  Investors are concerned about persistent inflation, higher interest rates, sky-high gas prices, and the war in Ukraine, which is driving up the cost of oil and other commodities. Facing this onslaught of challenges, most market analysts are forecasting a prolonged downturn. 

Stocks could fall another 7% to 15% from where they finished on Tuesday, according to a Goldman Sachs report that analyzed past economic recessions and showed that stocks could drop to 3,650 and possibly as low as 3,360. While the U.S. isn’t in a recession now, there’s a 35% chance the economy enters one during the next two years, analysts at the firm project. 

If the S&P 500 does slip into a prolonged bear market, it could