How major United States stock indexes fared Friday

VOLATILE Traders Peter
Tuchman far left and Patrick Casey watch the stock
sell-off yesterday at the New York Stock Exchange top

VOLATILE Traders Peter Tuchman far left and Patrick Casey watch the stock sell-off yesterday at the New York Stock Exchange top

The Dow Jones Industrial Average fell Friday by as much as 500 points before violently swinging upwards to a 140 point gain, a 640 point swing over the course of less than an hour.

Dow's and S&P 500's latest drops are more than 10% from their peaks on January 26, which constitutes a market correction.

Did the stock market crash?

Corrections are surprisingly commonplace, typically occurring about every two years.

"This is going to take longer to work out than people expect", he said. I'll examine the evidence, which is increasingly worrisome, momentarily. Blame it on large numbers. Several Dow members lost more than five percent, including American Express and Home Depot.

The Dow gained 330.44 points, or 1.4 percent, to 24,190.90. 2017 was an anomaly - it was a historically calm market. We grew accustom to smooth sailing.

It was only a couple weeks ago that America's Dow Jones and S&P indexes were at record highs.

The stock market is all about numbers, and the biggest one to remember in the wake of this month's steep losses is 10. So did the exchange-traded instruments that profited from low market volatility-and got clobbered when volatility spiked.

"The [economic] fundamentals haven't changed, they haven't deteriorated". Bond yields are rising. Rising yields have made bonds more appealing to some investors compared to stocks.

But a more complex explanation is the concern of the return of inflation, and more importantly, what it means for interest rates. The bond market is a decent indicator of fears about inflation.

But his key worry is that the market's technical picture is eroding. Such a rapid rise is unusual, and market analysts long warned that a pullback was overdue.

The big Amazon buzz that sent shipping stocks lower. The stock rose $3.27 to $30.18. Because the economy is already strong, that boost from Washington could speed up inflation. But he's getting more anxious, and he doesn't expect a quick rebound for stocks.

The VIX, a measure of market volatility, jumped 15% on Thursday. He also said that there is nothing wrong with the economy; if fact, the economy is performing better than it has in the last decade.

Dudley, who called the market slump "small potatoes", said the "jury is still out" on the number of rate hikes. A correction is healthy, unless it leads to a deeper downturn.

A stock market enters a correction when it drops 10 percent below a recent peak, as USA stock did on Thursday. Even the most ardent of capitalists understands this break-neck pace of stock market gains was hardly sustainable.

Bear markets are another story.

Keep in mind that you don't have to put every penny of spare cash into the market just to take advantage of a short-term dip. There have been 16 corrections in the S&P 500 since the beginning of 1980, according to data from Yardeni Research Inc.

"Investors are nervous about three things", said Larry Hatheway, an economist and Zurich-based asset manager.

I wouldn't sell into this market-yet.

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