What's more, 2012 is an election year, and when incumbent presidents are in re-election mode and handing out the goodies, the market tends to rise ; only twice in the past century has the S&P 500 posted an annual loss (one of them was 2008) during a presidential election year.
And, if that weren't enough, according to Standard & Poor's, history also shows — since 1945 — whenever the S&P 500 lost 10 percent or more in the third quarter (it was 12.1 percent this year), the index gained an average 7.2 percent in the fourth quarter, while rising eight out of nine times.
This fall, however, there's little in the way of the fundamentals to suggest historical trends will play out.
Government debtis weighing on Europe and the U.S., with emerging market economies pulling the cart, though less forcefully than before. Commodity price volatility has upset consumer and corporate balance sheets. The Treasury market has become a safe haven, with little return.
Still, some analysts say corporate earnings are holding up. Companies as diverse as Oracle , Nikeand General Mills recently reported better-than-expected second-quarter results, and Honeywell Internationalsaid it expectsthird-quarter earningsto be at the high end of its range.
Page 2 of 3 | Prev Page | Next Page