The tragic events in Japan are having an impact on market activity over the past several days. The issues surrounding the reactors at the Fukushima Daiichi power plant make new headlines throughout the day. As the below graphic shows, the S&P 500 index has contracted during past nuclear crises. The largest impact was Chernobyl in 1986 and the trough was reached 14 days after the Chernobyl event. The market recovered its losses within 20 days of the Chernobyl accident.
|From The Blog of HORAN Capital Advisors|
Source: Reuters, by author Ben Berkowitz
The nuclear crises events in Japan are certainly far from over; however, history seems to indicate the market has a tendency to overreact to these events in the short run.