Stocks haven't wasted time hitting the summer doldrums.
Just a month after stocks were at bull market highs, negative headlines have taken a nasty toll on sentiment and resulted in the biggest losses for investors since last summer's bloodletting.
Following a painful June-opening jolt, the Dow Jones industrial average now has a 2012 loss for the first time this year. The Nasdaq composite is in correction territory, down more than 10% from its 2012 high. And the Standard & Poor's 500 only narrowly avoided doing the same.
The big question now is how much worse could it get. "The bullish case is in serious trouble now," says Robert Maltbie of Singular Research. "The lack of economic improvement is a concern."
Stocks have been in a broad decline since May 1. But the worst whack of the year came Friday when the Dow plunged 277 points to 12,116 after May's jobs report showed non-farm payrolls increasing just 69,000. That fell far short of the 150,000 expected, says Michelle Meyer, economist at BofA Merrill Lynch Global Research.
A miserable May shaved 820 points, or 6.2%, from the Dow and 8.2% from the S&P. After Friday, the market is showing deeper bruises including:
•Correction looming. Following Friday's losses, the S&P is now down 9.9% from its 2012 high on April 2. The Dow isn't far behind, off 8.7% from its May 1 high. In 2011, it took the S&P three months to enter a correction after it peaked in April. This year it has almost accomplished that in a third of the time.
•Year's gains vanishing. Investors witnessed all the Dow's gains in 2012 evaporate as the measure is now down 0.8% in 2012. On May 1, when the Dow closed at a bull market high, it was up 8.7% for the year. The tech-heavy Nasdaq and S&P 500 remain in the black for the year, up 5.5% and 1.6% respectively.
•Important trading levels. The S&P 500 dropped below its average price over the past 200 trading days, a negative trend watched by some traders.
Investors' deep-rooted worries are also obvious in the flight into U.S. Treasuries. The yield on the 10-year Treasury fell below 1.5% for the first time, to 1.46% on Friday as investors sought safety, says Quincy Krosby at Prudential Financial.
Maltbie is in the camp that thinks more pain is coming. Some, though, say the selloff is overdone and this is a buying opportunity.
"Wouldn't it be nice to get another shot at the market?" says Doug Sandler of RiverFront Investment Group. "Here we are."