ETF Trends
ETF Trends

Nervous investors have been peppered with headlines this week screaming the S&P 500 is down 20% from its 2011 high. According to some media outlets, this arbitrary 20% figure markets an official bear market.

However, stock exchange traded funds have rallied the past two days in the face of the news. The iShares S&P 500 (NYSEArca: IVV) is down 15.5% over the past three months.

The S&P 500 opened at 1090.18 Tuesday, which was below the 1090.88 level that marked a 20% correction from its April 29 peak of 1,363.61. The Dow Jones Industrial Average and the Nasdaq were also dipping close to 20% off their highs. [Stock ETFs Falter on Recession Forecasts]

Although stock ETFs have bounced the past couple days, many investors remain wary of the market.

The problems over the late summer and fall months kept piling up, most notably the European debt drama and the global slowdown.

“Although the European debt crisis, the slowdown in emerging markets and concerns of a double-dip recession are still in people’s minds, few clients I spoke to believe that the legislative or executive branches of the U.S. government either understand or can successfully manage the domestic economy,” investment strategist Ben Warwick of Aspen Partners said, according to AdvisorOne.

“The markets are worried. Investors are uncertain about what’s happening in Europe and until we see some of that uncertainty cleared up, we are likely to have highly volatile markets. You find when the markets go down investors get very concerned, rightfully so,” Gary Thayer, chief macro strategist at Wells Fargo Advisors, commented, reports Reuters.

“Crises that plagued the markets throughout September have historically reached a crescendo in October and this year is no exception,” Warren added. “We’re shoring up protection for our portfolios and preparing for the worst.”

iShares S&P 500

For more information on the broad markets, visit our S&P 500 category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.