• Seesawing daily advances and declines have become commonplace for a stock market that’s proving nastier than your average bear. For instance, in the last week of November, the S&P 500 Index gained 12% -- its best weekly return since 1974. But it was negated by sharp drops earlier in the month, when the S&P 500 lost more than 6% on two days and more than 5% on three other days. Altogether, the market was down 7.17% in November, pushing losses to 37.66% for the year-to-date and to 40.53% since the market peak on October 9, 2007.
  
  
• This is the second nasty bear market in nine years, and the impact of those two bear markets on stocks’ performance has been devastating in this decade. The S&P 500 Index, with an annualized loss of 3.75% since 2000, is on track for its worst decade in its history. Only 13 more months remain in the 2000s, and the S&P 500 would have to generate a gain of at least 40.6% during that time to do better than the 0.1% annualized loss recorded in the Great Depression decade of the 1930s. (We think it’s possible that stocks may rebound 40% or more over the next 13 months.)
  
  
• The stock market’s losses in November were driven by a glut of bad news. Here’s a sampling. The federal government agreed to inject another $20 billion in capital and assume losses on hundreds of billions of dollars of assets at Citi, the ailing banking giant. The gross domestic product contracted at a 0.5% seasonally adjusted annual rate in the third quarter. The median home price fell 11.4% over the past 12 months, the biggest drop in the 39 years since the National Association of Realtors began keeping records. Retail sales fell for the fourth straight month. Wall Street analysts continued to cut their earnings estimates for 2008 and 2009. Goldman Sachs forecast that the unemployment rate would reach 9% by the end of 2009, compared with the current rate of 6.5%. The economies of Europe and Japan were declared to be officially in recession. And Federal Reserve Board officials anticipated that the U.S. economy would be in recession through the middle of next year, at least.
  
  
• If nothing else, the steep losses since October 2008 have resulted in a stock market that "abounds with so many bargains it’s hard to avoid stepping on them," as The New York Times put it. Of the 9,194 stocks monitored by Standard & Poor’s Compustat research service, 3,518 are now trading at less than eight times their earnings over the past year -- less than half the long-term average valuation of the stock market as a whole. What’s more, nearly one in 10 stocks trade below the value of their per-share holdings of cash -- a greater proportion than even in 1932, when the market was at its lowest point in the past 82 years. Indeed, because investors fear that stocks could get even cheaper, they have stampeded into Treasury bonds as a haven. Demand has been such that the yield of the three-month Treasury at month’s end was a mere 0.04%. In effect, shell-shocked investors were so risk averse that they were willing to accept almost no interest payment in exchange for the government guarantees that protect Treasuries.
  
  
• In November, all 10 sectors of the broad-based Russell 3000 Index lost money. The utilities/communication sector, a classic defensive sector, lost the least, less than 2%. Conversely, the financial-services and energy sectors were the loss leaders, down more than 20%. Financial services continued to feel the withering pain of the financial crisis. In 2007 financial services was the biggest sector, accounting for more than one-fifth of the market’s value, but its weighting has shrunk by about 30% since then. And energy continued to be plagued by falling oil prices: at month’s end a barrel of oil sold for about $50 -- a drop of more than 60% since last July. For the year-to-date, the consumer-staples sector has produced the best relative return, a loss of more than 20%. At the other end of the spectrum, the financial services, energy, and materials/processing sectors’ losses each exceed 50%.
  
  
• Mega-cap stocks, the largest of large-cap stocks, produced the smallest loss in November: the Russell Top 200 Index fell 6.61%. Small-cap stocks, as represented by the Russell 2000 Index, lost the most, 11.83%. For the year-to-date, mega-cap stocks have returned a negative 36.49%, the most modest loss of any capitalization segment.
  
  
• Value stocks performed better than growth stocks did on a relative basis in November. The Russell 3000 Value Index lost 7.53%, a performance edge of 0.73 percentage point over its growth counterpart. Value has outperformed growth by 2.34 percentage points for the year-to-date.

The views expressed represent the opinions of Turner Investment Partners and are not intended as a forecast, a guarantee of future results, or investment recommendations. Past performance is no guarantee of future results. The indexes mentioned are unmanaged statistical composites of stock-market performance. Investing in an index is not possible. Earnings growth does not necessarily lead to an increase in share prices. For institutional use only.