Markets

US Dow Jones plunges over 1000 points

US Dow Jones plunges over 1000 points

The Dow Jones industrial average was down 344.97 points, or 1.45 percent, at 23,515.49, the S&P 500 down 32.27 points, or 1.25 percent, at 2,548.73.

Wall Street's main indexes fell more than 1 percent in early afternoon trading on Friday, deepening losses in the past week that have put all three main US markets in correction territory. It may seem disturbing that the market can lose three months' worth of gains in just a week or two, but most investors have hung onto the vast bulk of their profits from their longer-term investments. Those included technology companies, banks, and retailers and travel companies and homebuilders.

Financial analysts regard corrections as normal events but say the abrupt stock market rout that began last Friday might have been triggered by a combination of events that rattled investors. Those include worries about a potential rise in USA inflation or interest rates and whether budget disputes in Washington might lead to another government shutdown. A pickup in inflation could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy.

"If I have to choose bonds or equities, with interest rates going up, bonds just got more attractive", she said.

"We haven't seen interest rates rise like this in a long time", Guerrini said. Boeing, Goldman Sachs and Home Depot took some of the worst losses.

Even with Friday's gains, the benchmark S&P 500 fell 5.2 percent for the week, its biggest weekly percentage drop since January 2016, as volatility spiked back up. It hasn't been that low since mid-November. The Nasdaq Composite was down 274 points, or 3.9%, at 6,777. "It can take two to three weeks to work through the system". "In January we talked about fear of missing out".

Because there won't be a quarter of negative GDP in Australia or the USA in the first quarter of 2018, things would really have to unravel for the rest of the year for us to get into recession territory.

"The losses were broad". The S&P 500 and Nasdaq also traded erratically before settling higher, wrapping up their worst week in years.

What is a stock market correction? A strengthening dollar and the biggest weekly increase in active US oil rigs in more than a year pushed March-dated crude $1.95, or 3.2%, lower, to $59.20 per barrel.




The recent turmoil follows a prolonged period of booming stock prices with virtually no sharp declines. The company also said it will pay $400 million to buy Australian retailer Bras N Things.

U.S. equities suffered its second sell-off in a week to hit 2018-lows with the Dow Jones and S&P 500 both entering what is deemed correction territory.

IRobot, which makes Roomba vacuums, plummeted 32 percent after projected a smaller annual profit than Wall Street was expecting. Goldcorp dropped 2.3 per cent and Kinross Gold was off 2 per cent. When investors are clustering in a handful of stocks or a couple of sectors, dangers rise. GrubHub stocks shot up by 27.4% after the online food delivery company announced a partnership with the parent company of KFC and Taco Bell, Yum Brands. The Dow gained 330.44 points, or 1.4 percent, to 24,190.90.

Rising U.S. debt issuance is expected to weigh on bond prices in coming months.

A key trigger of the stocks pullback was a strong United States jobs report a week ago that also showed rising U.S. wage growth, fuelling speculation the Federal Reserve will lift rates more than the three times already forecast this year. That also sent the pound higher.

The 10-year Treasury yield, which touched a four-year high of 2.88 percent on Thursday, is trading around 2.84 percent on Friday.

Stocks are not falling because investors have doubts about the economy.

In other commodities trading, wholesale gasoline remained at $1.77 a gallon. Silver lost 20 cents, or 1.2 percent, to $16.14 an ounce. Natural gas gave up 1 cent to $2.70 per 1,000 cubic feet.

The broad-based S&P 500 index was up 1.5% and the tech-rich Nasdaq moved ahead by 1.3%.