Dow Jones Drops More Than 1000 Points

In Tokyo the Nikkei 225 index rose 1.1 percent. The Nasdaq has lost 9.7 percent of its value in the same span, falling short of the 10 percent threshold that defines a stock correction. The Nasdaq Composite closed at 7,051.98 for a loss of -63.90 points or -0.90%.

The bull market has feasted on extremely low bond rates for years, but those days may be ending.

The gyrations come a day after panic appeared to course through Wall Street, with the Dow plunging a record 1,175 points on Monday.

Once again, rising interest rates are behind the continuing market wipeout - with USA 10-year government bond yields lifting as high as 2.88 per cent, its highest level in four years. The stock dropped $2.39, or 10.9 percent, to $19.57. There hasn't been one in two years, and by many measures stocks had been looking expensive. Experts do think the global economy will keep growing this year even though that is likely to bring more inflation. Enthusiasm about a corporate tax cut had helped drive the stock market to record levels. "This is fear rolling over itself", she said. That is painful for Japanese and other regional export manufacturers, whose competitiveness is hurt by stronger currencies that push their prices relatively higher.

The Canadian dollar was trading at 79.83 cents U.S., down from Monday's average price of 80.11 cents.

Australian shares shed four months of gains in just morning trading, with all sectors losing ground.

Rising interest rates hurt because stocks compete with bonds for investor dollars. That makes it easy to forget that the stock market's rise and fall is, well, pretty commonplace.

We're guessing that U.S. President Donald Trump won't be gloating about the stock market in upcoming speeches the way he did during last week's State of the Union Address.

It is the second-worst fall in history, eclipsed only by Monday's 1,175-point plunge. Brent crude, the benchmark for worldwide oil prices, lost 76 cents, or 1.1 percent, to $66.86 a barrel in London.

"If you put $100 into the market at the January 26 peak, you'd still have $90", said Greg McBride, chief financial analyst for "There was euphoria because there hadn't been a pullback", said Jeffrey Schulze, investment strategist at ClearBridge Investments.

Both the Dow Jones industrial index and the S&P 500 had erased their gains for this year on Monday. Over $5 trillion has been wiped from global stock markets since January 26, according to S&P Dow Jones Indices.

Twitter had a banner day, soaring 12 percent after turning in a profit for the first time. European shares closed down more than 2 per cent, and losses for the MSCI 47-country world index broke $US4 trillion.

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