Yesterday’s wicked 283-point drop in the Dow Jones Industrial Average lends renewed credence to the increasingly worrisome view that the bear market may have a lot more teeth. Supporting this argument is an intriguing study by the chief investment strategist of Standard & Poor’s, Sam Stovall, which looks at more than half a century of data to conclude it’s far too soon for the bear to hibernate.

Last week’s three-day, 528-point jump in the Dow may have been little more than a short-lived bounce, as the report opens the possibility of an additional 12% drop in the Dow before year-end.

The thrust of Mr. Stovall’s study is to provide investors with an insight into how stock prices fare following a bear market decline, and to offer some perspective on the length and depth of a bear market.

A market is in bear territory when stocks decline 20% between peak and trough. The latest bear market, as reflected in the S&P 500, kicked off October 9, and in theory became official almost nine months later, July 9, when the index crossed the 20% threshold.

Whether the bear has had enough after that 20% drop is anyone’s guess, but judging from the study, the answer is no. History shows that the S&P 500 doesn’t cross the 20% threshold until two-thirds of the way through the overall decline. In other words, there’s another third to go before anyone can legitimately claim the bear is dead.

The latest bear market is the 10th since 1956. The previous nine — which began their runs between 1956 and 2001 — averaged 14 months and produced an average loss of 32%. Thus, it is important to remember that in the latest instance it wasn’t until the ninth month that the S&P 500 finally fell into bear market territory.

Historical precedence would suggest the current bear market still has at least another five months and 12% more to go. It’s worth noting, though, that bear markets since 1956 have run as few as three months and as long as 31 months.

End results of the nine prior bear markets suggest this bear market could get progressively worse. Previous bear market losses have run a lot higher, including a 48.2% drop between 1973 and 1974, and a 49.1% fall between 2000 and 2002.

On a positive note, the market has overwhelmingly moved higher following any 20% drop in the S&P 500. A look at the past nine bear markets shows the S&P 500 averaging a 3% gain one month after a 20% drop, a 4.7% rise after three months, a 6.7% increase in six months, and a 16.5% gain one year later.

Given the market’s movement into bear market territory, S&P’s investment policy committee reduced its year-end target on the S&P 500 to 1,390 from 1,490. That’s a 5% drop from 2007’s close of 1,468, but above yesterday’s S&P 500 wrap-up of 1,252.

As a result of the bear market study and lingering economic problems, Mr. Stovall says a more defensive strategy is required. In this vein, he favors a trio of industries. The sectors and his top pick in each: health care (Johnson & Johnson); utilities (ONEOK), which is pronounced “one oak,” and consumer staples (Molson Coors). All three are also dividend payers, with ONEOK, an Oklahoma natural gas company, leading the way with a 3.5% yield.

What about energy stocks? “We think they’re still in a long-term bull market, but for now, the group is overbought,” Mr. Stovall says. Actually, he sees near-term vulnerability, given his expectation that oil — currently hovering just under $125 a barrel after recently climbing to an all-time high of $147.27 — could skid further, to about $110, in the next couple of months.

The bottom line from Mr. Stovall’s study of bear markets is that energy stocks are apt to have a lot of company in any further near-term vulnerability.

A colleague of Mr. Stovall’s at S&P, chief economist David Wyss, is estimating the projected recession will last 16 months — six months longer than the average recession since World War II. His reasoning: It will take a long time to wear away at the surplus of millions of homes, many currently in foreclosure, that were built during the housing boom.

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