Is The Bear Back? Six Financial Advisors Offer Opinions

(Dow Jones) The Dow Jones Industrial Average fell below the 10,000-point mark today. The Standard & Poor's 500 Index is off more than 12% from its April 23 high.

In other words, we're in correction mode. But the concern among financial advisors--and their clients--is whether this downward trend is heralding a return of the bear market.

With that in mind, here are how six financial experts are reacting to the latest market news:

Stephen R. Frantz, president, Tributary Capital Management, Omaha, Neb.

Bearish or bullish: Bullish

His take: "The recent volatility and correction in global equity markets should not be a huge surprise, given the unprecedented gains we've seen since the March 2009 lows. Over the near term, expect macro-economic and global concerns to drive investment decisions, leading to continued volatility and selling pressure. On a mid- to longer-term basis, the S&P 500 Index appears attractively valued, trading at about 12 times forward earnings. If the clouds lift overseas, and markets begin to discount just ugliness vs. Armageddon, you should see stocks here in the U.S. reignite a rally after a healthy 10-15% correction."

David Twibell, president of wealth management, Colorado Capital Bank, Denver

Bearish or bullish: Somewhat bullish

His take: "The jury is still out on whether this is simply a correction--as painful as it may be--or whether we're seeing a European version of the financial crisis that engulfed the U.S. system in 2008. There are very different catalysts, but the possibility of large-scale deterioration is clearly there. It is important to remember that the current environment is not the same as the one from two years ago. The world economy is improving, the debt issues facing the European Union are sovereign rather than private, corporate profits are strong and increasing, and many of the problems confronting the EU have been anticipated. That doesn't mean this cannot spiral out of control, but we are still assuming this is a correction rather than the start of a significant bear market. Having said that, I doubt we will see markets resume their uptrend anytime soon. I think the more likely scenario is that we see rotation into more defensive names and stabilization in the markets as we all digest the events of the past few quarters."

Dan Cook, senior market analyst, IG Markets, Chicago

Bearish or bullish: Bearish

His take: "We are in the midst of a true correction--and it's most likely overdue. The level of this correction is still to be seen, but there is definitely some room to move down. The recent drop has absolutely 'felt' different than the small, shallow corrections that started in June and October 2009 and January 2010. The main focus is still the European debt crisis. While traders continue paying attention to the traditional economic indicators such as employment, manufacturing data and the housing markets, they are not necessarily trading them. It is going to be hard to put together a case for the bull market to resume until some type of stability can be found in the euro zone (if it can be found) and the fear of debt contagion eases. It's also worth noting that much of the 2009-10 rally was a liquidity rally without a solid foundation. It was spurred on by cheap cash and some very large players spending that cash in equities. It was not a rally that was fueled by a large number of individual investors."

Denis M. Horrigan, director, KR Wealth Management, Farmington, Conn.

Bearish or bullish: Cautiously bullish

His take: "The markets are digesting some troubling news domestically and from Europe. The U.S. economy is entering a difficult transition, from a patient that was on life support (government stimulus, low rates) to one that is trying to breathe on its own. This usually leaves the markets very sensitive to any bad news. We feel the markets have become oversold, just as we thought they had become overbought a month ago. The growth in the euro zone has been revised down recently and that gives cause for concern, but the GDP growth estimates in China, Brazil and the U.S. have all been revised up. Thursday's employment numbers surprised to the downside, but it's important to keep in mind that the private sector has added jobs in five of the last six months. We are definitely defensive and skeptical, but we do not feel this is the beginning of another severe bear market."

Mark Luschini, chief investment strategist, Janney Montgomery Scott, Pittsburgh

Bearish or bullish: Bullish

His take: "We view this correction as an opportunity rather than the beginning of a move toward bear-market territory. We have taken the position that the fundamental underpinnings for the economy, and therefore corporations, are strong enough to support an improving climate for profits. As a consequence, we still view equities, on balance, as an attractive means of growing capital in this environment. We have not, however, deviated from our theme of buying shares in the higher quality companies that exhibit the characteristics of large capitalization, low price/earnings, high free cash flow, clean balance sheets and handsome dividends. The decline in the stock market we are experiencing has helped to bring more of those companies back to price points where investors should be comfortable making purchases."

Howard S. Gartenhaus, founder, Gartenhaus Financial, Rockville, Md.

Bearish or bullish: Bearish

His take: "This is not the beginning of a new bear market. We have been and continue to be in a long-term secular bear market that began in 2000. The shorter-term cyclical bull market that started in March 2009 was an upside correction that has apparently ended as of April 23, 2010. The potential is there for a significant retracement of the gains that were made over the past 13 months. This time around, the culprit is the European Union. Just as we were told that subprime was a small part of the financial system and not to worry, I believe the euro problem will cause systemic risk going forward. I do not believe that we will breach the lows seen in 2009, but we will drop more than 20%, which is considered a bear market by many definitions."