Markets Down Again, but Election Could Signal a Turnaround

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Markets finished this Hurricane Sandy-shortened week down roughly 1% today. But better times could be ahead the rest of the month.

In presidential election years, November is the best month for the Dow Jones Industrial Average and S&P 500 indices. The Dow climbs by an average of 1.6% in election years. The S&P gains 1.4%.

It makes sense. There's so much uncertainty in the markets leading up to an election that once a new president has finally been elected investors go on a collective spending spree. Add in the fact that November is already the third-best month for stocks historically, and it generally makes for boom times in the market in election years.

The market could certainly use a November rally this year. The S&P has fallen 2% in the last month. The Dow is down nearly 3%.

The Nasdaq has actually had the worst month, declining more than 4% since the start of October. Unfortunately, election years are typically bad for Nasdaq stocks, with an average drop-off of -0.8%.

The Nasdaq had the worst day of the three major indices on Friday, shedding 1.26%. Apple's ( AAPL ) continued downward spiral was the main reason. The world's largest tech stock dipped all the way to $576.80 a share, bringing its month-long decline to almost 13%.

If Apple keeps falling, it may be another rough November for the Nasdaq. For the other indices, however, the election should signal a welcome turnaround.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: AAPL

Wyatt Investment Research

Wyatt Investment Research

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