Equity markets drop amid continued choppiness, bond yields dip

The New York Stock Exchange

The New York Stock Exchange

Wall Street stock indexes repeatedly swung from positive to negative territory during Tuesday's session while the Dow Jones Industrial Average had a more than 1,100-point difference between its intraday high and low.

The question that vexed traders: were the wild swings of the past two days the start of a deeper move down or just clearing the way to the resumption of the aging bull market, which would turn nine on March 9.

Another reason the stock market has risen so much over the past year has been the steady growth in corporate profits.

Additionally, last week, former U.S.

It was a steep spike in yields last Friday that sparked the initial Wall Street rout, forcing sales by a host of highly leveraged funds, which ramped up volatility and drove yet more selling. "New buyers are showing up, who were waiting for the prices to go down".

"I'd like to see buying come in late in the day instead of having a selloff like we had yesterday", he said.

"These types of moves tend to take about three weeks to get through the system".

Concerns about higher bond yields and interest rates spurred recent selling of equities, though the retreat in the market had been long awaited by investors after months of advances.

"We've been looking at this as an opportunity to incrementally add a little bit of risk - not get over our skis, but a little bit", said Erin Browne, head of asset allocation at UBS Asset Management in NY.

World stock markets fell on Friday, with major USA equity indexes shedding around 1 percent after swinging between positive and negative territory, a day after a plunge that confirmed a correction for the market.

The Dow is down 858.76 points, or 3.5 percent.


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

The Dow Jones Industrial Average .DJI rose 567.02 points, or 2.33 percent, to 24,912.77, the S&P 500 .SPX gained 46.2 points, or 1.74 percent, to 2,695.14 and the Nasdaq Composite .IXIC added 148.36 points, or 2.13 percent, to 7,115.88. The dollar index last rose 0.13%, with the euro up 0.06% to $1.2384.

Technology, materials and consumer discretionary were the top-performing sectors on Tuesday.

Oil sank as record-high USA crude output added to concerns about a sharp rise in global supplies. Even after this week's losses, the S&P 500 index is up 12.5 percent over the past year.

Wall Street stocks closed the day in the red after gaining earlier.

Dallas Fed President Robert Kaplan said in Germany that rising USA wages may not push inflation higher. Last Friday, official US data showed rising wages, renewing concern about inflation and rate hikes by the Federal Reserve.

Traders are still braced for more volatility as they try to figure out if the swings of the past week are the start of a deeper correction or just a temporary blip in the US market's nine-year bull run.

On Thursday, the 10-year US Treasury note yield rose as high as 2.884 percent, nearing Monday's four-year peak of 2.885 percent, after the Bank of England said interest rates probably needed to rise sooner than previously expected.

USA stocks rebounded from a violent selloff to post the biggest rally in 15 months as investors poured back into some of the most beaten-down sectors.

US stocks plunged the most in 6 1/2 years, with the Dow Jones Industrial Average sinking more than 1,175 points; the equity selloff reached a fever pitch amid rising concern that inflation will force interest rates higher.

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