Dow plunges 1000 points as a weeklong market rout continues

Marco Green
February 10, 2018

The Standard & Poor's 500 index was down 8 points, or 0.3 percent, at 2,639.

The broader Standard & Poor's 500 index rose 46 points, or 1.7 percent, to 2,695.

Thursday's decline followed the largest drop in the Dow's history on Monday when it fell 1,175 points or 4.6 percent. The Nasdaq lost 274 points, or 3.9 percent, to 6,777.

Dow futures dropped about 150 points on Wednesday morning as the volatility that has rocked markets for more than a week lingers. Those including technology companies, banks, and retailers and travel companies and homebuilders. The market had run up too high, too fast and needed to let off some steam, they say. Amazon rose 2.2 percent. The yields on 10-year Treasury bills stood at 2.779 percent, below recent highs, and corporate bond rates held steady Monday, suggesting that a stampede out of stocks is not imminent.

The Russell 2000 is down 83.48 points, or 5.4 percent.

The Dow was up 141 points, or 0.6 percent, at 24,483. Britain's FTSE 100 shed 0.7 percent.

Global markets also fell.

The S&P 500 is down 92.61 points, or 3.5 percent.

Investors were eyeing the recent steep slide as an opportunity, an extreme example of the "buying the dip" that has symbolized the market's steady climb to record highs.

The prospect of ballooning deficits also stoked jitters among investors this week after Congress agreed to a $400 billion budget deal just weeks after voting to slash taxes. The fear is that the US economy could overheat, forcing the Federal Reserve to aggressively raise interest rates. But concerns about oversupply in the bond market and higher interest rates have been growing, he added.

Shares were lower in all Asian markets after Wall Street officially began its first correction in two years, though losses were moderate with no sign of panic selling. Numerous companies that led the market's gains over the a year ago have struggled badly in the last week.

"Today's sell-off represents what is, very likely, simply the ebb and flow of our stock markets, and we recognize that", Pence said during a stop in Alaska en route to South Korea to attend the Winter Olympics. "However, our view remains that it's just another correction", said Shane Oliver of AMP Capital in a report.

Corrections of up to 15 percent "are normal", said Oliver.

The VIX index of market volatility surged another 32% on Tuesday.

Among the biggest losers Tuesday was the Nikkei 225, which had ended 4.7 percent lower. The housing industry is solid, and manufacturing is rebounding. That's good for the economy, but investors anxious it will hurt corporate profits and that rising wages are a sign of faster inflation.

A new survey by the American Association of Individual Investors showed the percentage of US individual investors expecting a decline in stock prices has hit a three-month high.

On the local bourse, consumer stocks were well down, led by an 8.5 per cent slide in Myer after the department store giant flagged a significant deterioration in trading conditions in the December quarter. The losses were steady, unlike the sharp swings seen over the past few days. Fast rising interest rates would make that argument much less persuasive.

In currency markets, the dollar edged up to 108.87 yen from Thursday's 108.84 yen. Natural gas fell 11 cents, or 4.2 percent, to $2.58 per 1,000 cubic feet. Brent crude, used to price global oils, slid 94 cents, or 1.5 percent, to $63.87 in London.

Other reports by Click Lancashire

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