The 3.6 percent slide suffered by the S&P 500 index since hitting a record high of 1,991.39 July 24 doesn't presage a bear market, says Byron Wien, vice chairman of Blackstone Advisory Partners.
Wednesday, the Standard & Poor’s 500 Index added less than 0.5 percent to 1,921.20 at 3:53 p.m. in New York. The gauge erased an earlier loss after dropping below its average level for the past 100 days.
Market fundaments are in good shape,
Wien tells CNBC. "The economy is doing well, . . . the valuations are reasonable. So I think this is a correction in an ongoing bull market.
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"There was too much optimism. When everybody is feeling complacent and comfortable, . . . the market is vulnerable. And there's enough geopolitical turbulence to precipitate that."
The economy grew 4 percent in the second quarter. The S&P 500 had a trailing price-earnings (P/E) ratio of 18.8 Friday, up from 18.6 a year ago, according to Birinyi Associates. The P/E ratio hit a four-year high in June.
Analysts estimate that profits for S&P 500 companies advanced 9.4 percent in the second quarter, with sales rising 4.2 percent, according to Bloomberg.
Others too believe the market's decline is likely to be temporary. "There's cash sitting on the sidelines looking for an opportunity to go back in," Kevin Caron, a portfolio manager for Stifel Nicolaus, tells
Bloomberg.
"It may just be that there are some value investors who are stepping in and starting to nibble here. The correction we've seen so far has been enough to get at least some investors' attention."
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