Febrero 19, 2018

Dow Jones stock index hit by record falls

09 Febrero 2018, 12:03 | Dolorita Barahona

Dow Jones stock index hit by record falls

Trader Michael Milano right works on the floor of the New York Stock Exchange Thursday Feb. 8 2018. U.S. stocks are lower Thursday morning as losses from the previous day continue

The Dow Jones Industrial Average tumbled about 4.15% to 23,860, notching its second-worst point drop in history.

After strong downturns at the end of last week, Wall Street started Monday trading session with decreases, as U.S. government bond yields and inflation are accelerating, suggesting that the Federal Reserve will raise interest rates faster than expected. As investors can get better rates of return on bonds, they pull money out of stocks.

The Dow Jones Industrial Average was headed sharply lower Thursday as selling gathered steam headed into the close of trade.

Low interest rates that have most recently powered the stock market and economy may be ending as both the economy and job market gain strength.

A bear market happens when stocks decline over a prolonged period, with the same 20 percent threshold.

US equities extended their losses in a week overtaken by wild swings in the stock market.

Market professionals have been predicting a pullback for some time, noting that declines of 10% or more are common during bull markets.

On Wall Street, all but two S&P 500 index sectors ended higher, with economically sensitive materials, technology and consumer discretionary indexes posting the biggest gains.

Elsewhere in the region, Japan's Nikkei 225 index closed down 4.7 percent, while Hong Kong's Hang Seng dropped 4.5 percent and South Korea's Kospi index gave up 2.6 percent.

'The sell-off in the last few days is likely to reverse the trend, and potentially accelerate it further, particularly if investors start to unwind it over concerns that we could fall further, which seems likely if events in Asia this morning are any guide'.

After hitting a record high of 26,617 on January 26, the Dow closed below 24,000 Thursday for the first time since November.

While traders dumped everything from energy to finance and tech stocks, the U.S. president, Donald Trump, said nothing. It can also send bond yields higher, which makes it more expensive for individuals, companies and even the US government to borrow money. But that trade has turned bad amid wild price swings that have turned suddenly violent since the market's peak. The so-called fear gauge tracks traders' expectations for future instability and moves opposite the S&P 500 most of the time. "And what's interesting about this is it's primarily been driven by positive economic results, but that positivity has driven a likelihood for wage increases, which triggers concerns of inflation".

The Dow finished down 4.6 percent at 24,345.75.

"Well, the President, like the rest of the White House, is concerned about long-term economic indicators", Shah told reporters.

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