NASDAQ entered into the bear market in February 2008. After six year such a big stock index entered into the bear market, where the stock prices declined by 20%. In this paper we will discuss about this fact briefly. In February 2008, NASDAQ entered into the bear market where the share prices had decreased by 20% after the recent hike.
NASDAQ was one leading stock index in US who entered into the bear market after six years. The Standard & Poor’s 500 and the Dow Jones Industrial Average were low and so were the market sentiments. The traders behaved as if the stock prices had been decreasing for several months.
The NASDAQ fell 31 points to 2279, that is, it decreased by 20.3% after the recent hike achieved three months ago, October, 2007. In March, the NASDAQ crossed the path of bear, when the stock prices decreased by almost 22%. In the beginning of 2008, NASDAQ did not have any idea of entering into the bear market.
The S&P index broke the 80-week trend. It needed to test the 1,250 areas, and then only the bottom line can be fixed.
NASDAQ advised the stockholders to use Put options instead of Call to minimize the risks.
The entry of NASDAQ into the bear market did not signify any alarm but just a noise. However, in 2008, NASDAQ witnessed a 43% decrease compared to its all time high in the year of 2000.