Dow Plunges 1000 Points As Selling Spreads

The Dow Jones industrial average fell 1,032 points into the red, down 4.2 percent, to close at 23,860 as fears deepened over rising interest rates.

The Dow Jones industrials plunged more than 1,000 points Thursday, deepening a weeklong sell-off and dragging the stock market into an official "correction" for the first time in two years as fearful investors sought to get out before their losses mounted.

"I don't know if it's over, but a market range maybe established because if you look at S&P e-minis, we're trading at mid-point of a two-week range, starting back to January 29", Brady said.

USA markets were plunged into fresh turmoil on Thursday as the Dow Jones plunged by more than 1,000 points and the S&P shed 3.7 per cent, reigniting fears about a severe stock market rout. The Nasdaq composite fell 274.82 points, or 3.9 percent, to 6,777.16.

The current earnings yield for the S&P 500 index companies stands at 5.4 percent, below the 6.4 percent average of the past 20 years.

The Dow recovered some of its early plunge and was down 127 points, or 0.4 percent, at 24,255. The S&P 500, for example, is one of the major fallers, was down 7.8 percent since its latest record high on January 26 as of Monday's close.

The market, in its second-longest bull run, had not seen a correction for two years, an unusually long time. Rising yields have made bonds more appealing to some investors compared to stocks. Retailers including Amazon and Home Depot made small gains, a possible sign of confidence the USA economy will keep growing.

Tuesday's rebound came a day after a steep selloff that brought the biggest percentage daily declines for the S&P 500 and the Dow since August 2011 and a near 1,600 point intraday loss for the Dow.

The steep drop in US stock indexes followed a broad slide in global markets.

The sharp declines in recent days marked a pullback that had been long-awaited by investors after the market minted record high after record high in a relatively calm ascent.

"When you have an early morning rally in a decline of this nature, all that does is invite selling", said Bruce Bittles, chief investment strategist at Baird.

"Chinese domestic markets do show some correlation to other markets in terms of sentiment during these extreme bouts of volatility, however ... they still represent an attractive investment case", said Francois Perrin, a portfolio manager at East Capital.

As well as the broader sell-off, analysts said stocks in China were weighed down by people selling ahead of the Lunar New Year holiday.

"Investors should avoid the "hero complex" and try to declare a bottom", he says.

Technology and financial stocks led advances on the S&P, while industrial stocks helped lift the Dow. That's less than the 10 per cent seen as a correction.

Declining issues outnumbered advancing ones on the NYSE by an 8.26-to-1 ratio; on Nasdaq, a 5.58-to-1 ratio favored decliners. Germany's Dax index slid 0.3% and France's Cac 40 index was 0.4% lower.

Stock indexes around the world also fell Monday, including London's FTSE 100, which closed down 1.5 percent, and Japan's Nikkei, which fell 2.5 percent.

Bond prices rose. The yield on the 10-year Treasury fell to 2.83 percent from 2.84 percent.

U.S. Treasury Secretary Steven Mnuchin said recent volatility was not enough to rock market fundamentals. Brent crude, the benchmark for global oil prices, rose 36 cents to $67.22 a barrel in London.

In currency markets, the dollar edged up to 108.84 yen from Thursday's 108.73 yen. The euro slipped to $1.2263 from $1.2276.

USA equities suffered another sell-off yesterday (8 February) to hit 2018-lows with the Dow Jones and S&P 500 both entering what is deemed correction territory.

  • Zachary Reyes