Will March Bring Spring to the Markets?

While January was a poor month for the markets overall (see story here), February turned out to be worse. Both the Dow Industrials (Dow: .djia) & S&P 500 (Chicago: .spx) once again had their worst month since last October – a feat which they both achieved in January as well.

In fact, the declines last month are horrendous when compared to prior Februarys. Both the Dow and S&P had their worst February since way back in 1933.

Additionally, the Dow is now down six consecutive months, as it hasn’t posted a monthly gain since last August. During this period, the blue chip average has plunged 38%, for its worst six-month decline since 1932.

Some Glimmer of Hope for March?

Since 1928, the Dow has posted a losing streak of six months or more on five different occasions (prior to its current streak). Most of the times, however, the Dow’s monthly losing streak stopped at six months. The one exception came in 1941-1942, when the Dow posted nine straight months of declines.

Could March snap the Dow’s current six-month losing streak?

Historically, March has been a better month for the indices.  Both the S&P and Dow have been up ~60% of the time in March.  The Dow has averaged gains of 0.7% while the S&P has brought in the spring with an average 0.4% gain in March.

Additionally, according to Birinyi Associates, prior to this year, there have only been four times when the Dow has fallen more than 10% during the first two months of the year. In each of those years, the Dow finished the month of March with a gain.

                     Dow Performance

Year     Jan – Feb              March  
1920     -14.97%               +12.75%   
1933     -14.25%               +7.80%     
1978     -10.71%               +2.05%    
2000     -11.91%               +7.84%    
2009     -19.75%                        ???

Could this be another indication of a possible March rebound? Let’s keep our fingers crossed!

In the meantime, here’s a look at how many of the major sectors performed in February:

S&P 500 Sectors                                  
Telecom                        -2.84%
Tech                             -4.30%
Cons. Staples                 -7.24%
Cons. Discretionary          -8.69%
Materials                        -8.85%
Energy                          -12.46%
Healthcare                     -12.84%
Utilities                         -12.95%
Industrials                     -17.96%
Financials                      -18.41%

Other Major Sector Indices                                
Gold Stocks                   +1.58%
Retailers                        -3.11%
Semis                           -4.45%
Biotech                         -6.01%
Oil Services                   -6.12%
Housing                          -8.73%
Brokers                         -11.23%
Consumer                      -11.62%
Oil Stocks                      -11.70%
Drugs                            -12.31%
Natural Gas Stocks          -12.35%
Banks                           -15.88%
Healthcare                     -18.59%
Cyclicals                        -19.52%
Defense                         -20.08%
Insurance                       -21.39%
REITs                           -21.71%
Airlines                         -21.86%

For now, the futures are pointing to another drop.  Dow stocks Bank of America (NYSE: BAC), American Express (NYSE: AXP), General Motors (NYSE: GM), General Electric (NYSE: GE), Home Depot (NYSE: HD), JP Morgan Chase (NYSE: JPM), Verizon (NYSE: VZ) and Wal-mart (NYSE: WMT) are all pointing to drops over 2% in the premarkets.

Comments?  Send them to bythenumbers@cnbc.com


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