Before the market opened yesterday, the Nikkei had closed the day with a 2.73%% gain and major European indexes were faring well. The S&P 500 opened higher and rallied to its 1.22% intraday high in the late morning, trading on expectations that Fed Chairman Bernanke will hold the line on QE in his address on Wednesday following the June FOMC meeting. However, around 2 PM the Financial Times ran a piece with a title that spooked the market: Fed likely to signal tapering move is close. The S&P 500 promptly dropped a full percent from its intraday high in less than an hour. Traders then bought the dip and lifted the index to its closing gain, well off the high, at 0.76%.
Here is a 5-minute look at yesterday's action with a bit of Friday at the front-end for context.
Yesterday's action was on fairly light volume.
The S&P 500 is now up 14.92% for 2013 and 1.81% below the all-time closing high of May 21.
For a better sense of how these declines figure into a larger historical context, here's a long-term view of secular bull and bear markets in the S&P Composite since 1871.