Dow industrials drop another 1000 points as selling spreads

Andrew Cummings
February 9, 2018

On Tuesday, U.S. stocks roared back from Monday's selloff, when the Dow Jones Industrial Average and benchmark S&P 500 index saw their biggest one-day declines in two years. The market appears to be telling us that earnings rather than valuations will have to do the heavy lifting for the next year or two.

The Standard & Poor's 500 stock market, a broader market gauge that is a core holding in 401 (k) plans, also fell into correction terrritory.

By Cormac Mullen Asian stocks fell Friday following a plunge in their United States counterparts as the dread that gripped equity markets earlier in the week re-emerged, amid concern rising interest rates will drag down economic growth.

European bond yields also rose, lifted by the prospect of increased fiscal spending after Wednesday's coalition government deal in Germany. This is the lowest level for this average since March 10, 1973 when it was 222,000.

Fidelity International's chief investment officer for Japan, Takashi Maruyama, said the "massive volatility" was a reaction to the rapid rise on the Japanese market since a year ago.

Some of the factors causing indexes to fall recently are fears about rising interest rates, inflation, and a strong employment picture where wage growth could cause inflation to rise. Gold fell $7, or 0.5 percent, to $1,329.50 an ounce and silver dipped 9 cents, or 0.5 percent, to $16.58 an ounce.

In corporate news, shares of Twitter soared 12.15 percent to 30.18 US dollars apiece on Thursday, after the social network delivered better-than-expected quarterly results and reported its first-ever quarter of profitability.

The benchmark 10-year USA note yield rose to 2.88 percent before slipping to 2.848 percent Thursday, holding around multi-year highs.

"While volatility in the markets has eased over the last couple of days, it has remained at very high levels-probably a sign of the ongoing nervousness among investors which may leave markets vulnerable to further declines", Craig Erlam, senior market analyst at Oanda said in a note.

Corrections are common during bull markets. After all, the market had been uncharacteristically calm for more than one year.

The latest round of selling knocked the Dow and S&P 500 back into the red for the year.

While those concerns have been the catalyst for recent selling, the retreat in equities had been long awaited by investors as the market climbed nearly steadily to record highs earlier this year.

Investors often buy gold when they're anxious about market volatility, but they aren't doing that now. Heating oil lost 1 cent to $1.92 a gallon.

Australia closed up 0.7 percent.

In currency trading, the dollar fell to 109.02 yen from 109.54 yen late Tuesday. The euro fell to $1.2280 from $1.2392. For the S&P 500, it is its third drop of greater than 2 percent in the last five days.

Other reports by iNewsToday