Published: Sat, February 10, 2018
Sports | By Brooke Harris

Dow industrials drop 600 points as market losses deepen

Dow industrials drop 600 points as market losses deepen

The S&P 500 lost $2.49 trillion in market value from January 26 through Thursday, according to S&P Dow Jones Indices.

An early gain in the market quickly evaporated and the selling intensified in the afternoon.

The S&P 500 slumped 3.8 percent on Thursday, while the Dow dropped 4.2 percent as losses accelerated late in the trading day.

Bond prices fell. The yield on the 10-year Treasury rose to 2.85 percent from 2.83 percent late Thursday.

China's stock market benchmark has fallen as much as 5.5 percent after the sharp sell-off on Wall Street. They also present an alternative to investors who may reallocate some funds to bonds from equities.

The big sell-offs around the world this week have been pinned partly on concerns over the prospect of higher interest rates.

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The last time the S&P 500 entered a correction was early 2016, and that came on the heels of another selloff in August of 2015.

The first level gets triggered if the S&P falls 7% between the opening of trading hours at 9:30 NY and 3:25 p.m.

While details of the monthly employment report suggested the concern about accelerating wage gains was premature, it does appear that faster wage growth is coming.

The Standard & Poor's 500 index slipped 39 points, or 1.5 percent, to 2,541. Energy was the lone major S&P sector to end negative as oil prices tumbled.

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

European stock markets finished higher overnight, snapping a seven-day losing streak.

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That's because the stock market as measured by the S&P 500 index has to fall more to trigger those halts.

IBD'S TAKE: After the Thursday, Feb. 1, market action - and before Friday's and Monday's market drubbings - IBD changed its market outlook to "uptrend under pressure" from "confirmed uptrend", the equivalent of a green light turning yellow.

The London, Paris and Frankfurt indexes gained between 1.5 and 2 per cent.

"This whole correction is really about rates. about inflation creeping up. about people thinking the Fed is either behind the curve or actually has to be more aggressive, "says Stephanie Link, global asset management managing director at TIAA". The market's main gauge of volatility, the CBOE Volatility Index, fell 4.4 to 29.06 on Friday but was still almost three times the average level of the past year.

"The sellers remain in clear control right now as a lot of the excess froth we saw in January, has now been unwound or erased", said Adam Sarhan of 50 Park Investments. The Nasdaq composite lost 125 points, or 1.8 percent, to 6,926.

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