This information is paraphrased from The Wall Street Journal Guide to Understanding Money and Markets by Wurman, Siegel, and Morris, 1990.
One common myth is that the terms “bull market” and “bear market” are derived from the way those animals attack a foe, because bears attack by swiping their paws downward and bulls toss their horns upward. This is a useful mnemonic, but is not the true origin of the terms.
Long ago, “bear skin jobbers” were known for selling bear skins that they did not own; i.e., the bears had not yet been caught. This was the original source of the term “bear.” This term eventually was used to describe short sellers, speculators who sold shares that they did not own, bought after a price drop, and then delivered the shares.
Because bull and bear baiting were once popular sports, “bulls” was understood as the opposite of “bears.” I.e., the bulls were those people who bought in the expectation that a stock price would rise, not fall.
In addition, the cartoonist Thomas Nast played a role in popularizing the symbols ‘Bull’ and ‘Bear’.
Finally, Don Luskin wrote a nice history of these terms for TheStreet.com on 15 May 2001.
Article Credits:
Contributed-By: David W. Olson, Jon Orwant, Chris Lott