U.S. Stock Slump Fits With Bull-Market Pattern: Chart of Day

U.S. stocks are falling into “a recurring pattern” of volatility this year as the economy’s rebound gains momentum, according to Jeffrey Kleintop, chief market strategist at LPL Financial.

“The environment may be more like that of 1994 and 2004, the last two times the economy transitioned from recovery to sustainable growth,” Kleintop wrote yesterday in a report.

The CHART OF THE DAY shows how the Standard & Poor’s 500 Index’s performance since the beginning of last year compares with its movement during 2003 and 2004. The report featured a similar chart.

Between Jan. 19 and Feb. 8, the S&P 500 lost 8.1 percent. The magnitude of the decline was in line with its setbacks six years earlier, depicted in the chart. The index slid 5 percent to 10 percent three times during 2004, as it did in 1994, even though a bull market was in progress. (more)