Global Markets Are In A Bear Market

Investors went bargain hunting on Friday, a day after stocks sharply dropped on elevated fears of economic weakness and the health of the European banking system. U.S. shares were lifted by better-than-expected retail sales data showing consumer spending regained some momentum in January. Oil prices and U.S. bank stocks sharply rebounded Friday, too, as the Dow and S&P ended a five-day losing streak.

“The markets may have decided that the U.S. is headed for recession, but obviously no one told U.S. consumers,” said Paul Ashworth, chief U.S. economist for Capital Economics.

The Dow Jones Industrial Average (INDEXDJX:.DJI) ended the last session of the week up 313.66 points, or 2 percent, at 15,973.84. The broader Standard & Poor’s 500 index (INDEXSP:.INX) gained 35.70 points, or 1.95 percent to 1,864.78. The Nasdaq composite (INDEXNASDAQ:.IXIC) rose 70.68 points, or 1.66 percent, to 4,337.51.

The positive swing comes after a widely watched index of global markets dropped 20 percent from its all-time high in May, which means stocks worldwide are now in abear market. While U.S. markets are still considered bullish, the Dow and S&P have fallen 13 percent from their previous recent highs and the Nasdaq is down 17 percent. Markets are considered bearish when they drop 20 percent from previous recent peaks.