Can the US equity markets get any worse? The quarter just ended was the worst for the S&P 500 in fifteen years – and the worst six-month period for the index in 28 years. September is traditionally the worst month for stocks – and 2002 was no exception.
For the month, the Russell 2000 shed 7.34 per cent, while the NASDAQ was 10.86 per cent lower, the Wilshire 5000 was down 10.17 per cent, the S&P 500 11 per cent lower, and the Dow was down 12.37 per cent.
For the quarter, the S&P fell 17.63 per cent, its worst quarterly loss since the fourth quarter of 1987 – the era of Balck Monday – while the Dow, with a quarterly decline of 17.87 per cent, is at a four-year low. The NASDAQ, down 19.9 per cent for the quarter, is at a six-year low. The Russell 2000 was 21.7 percent lower for the third quarter, and the Wilshire 5000 was 17.16 per cent lower.
Year to date the Dow is down 24.24 per cent – and that is the bright spot. The Russell 2000 is down 25.84 per cent, the S&P 500 is nearly 29 per cent lower, the Wilshire 5000 is down 27.40 per cent, and the NASDAQ is down 39.91 per cent.
No wonder, after weeks of rumors, Fidelity Investments finally announced that it had decided to lay off 1,695 employees, roughly 5.4 per cent of its work force. The final result was smaller than rumors had suggested.
And no wonder nearly half (45 per cent) of respondents to a new survey in the US say real estate will outperform the stock market in the next three years. Only 12 per cent think real estate will do worse, while 28 per cent say real estate investments and the stock market will perform the same. 15 per cent do not know, according to the September survey about real estate investments conducted by Opinion Research Corporation and sponsored by Behringer Harvard Funds. Women were more optimistic then men (51 versus 40 per cent), as were younger investors compared to those over age 55. Three-quarters of the participants use a financial advisor, though just 21 per cent say they have ever been pitched real estate as an investment – however, 40 per cent of those made the purchase.