Febrero 19, 2018

Wall Street falls but trading still choppy; bond prices up

09 Febrero 2018, 11:49 | Dolorita Barahona

Wall Street falls but trading still choppy; bond prices up

Worried about the stock market? The media may have something to do with that

US stocks finished lower on Wednesday, losing ground late in the session as a jump in Treasury yields kept investor nervousness high.

Trump has frequently commented on gains by the market during his first year in office.

The Dow Jones Industrial Average rallied on Tuesday and shot up 568 points, a day after it plunged a record 1,175 points on Monday. At its worst on Monday, the Dow was down more than 1,500 points. Crashes generally unfold over a longer period, with a succession of sharp declines.

But Lutz noted the market could likely spike again before a correction settles in. It represented a full market correction, defined as a 10 percent drop from its 52-week high.

The market's main gauge of volatility, the CBOE Volatility Index, fell to 26.18 on Thursday, still more than twice the level it held over the past few months. The Dow ended the day higher by 567 points.

The dollar index rose 0.84 percent, with the euro down 0.03 percent to $1.2258.

At 10:09 am ET (15:09 GMT), the Dow Jones Industrial Average was up 228.25 points, or 0.92 per cent, at 25,141.02.

Corrections are seen as entirely normal occurrences, and the market, now in its second-longest bull run of all time, hasn't seen one in two years, an unusually long time.

Trump, who has been keen on taking credit for the stock market boom since taking office, has stayed conspicuously mum on the recent downswing. The correction has led to significant fear among investors that the world could be nearing the end of the nine-year bull run in stocks. That's when stocks began climbing back from their steepest declines of the financial crisis. Hence all the focus on exactly how many times the Fed will raise rates this year.

What makes this past week's market drop particularly noticeable for investors is how rare a decline has been for stocks.

Global markets followed suit last night, with Japan's Nikkei 225 closing 4.7% lower, while Hong Kong's Hang Seng was down 5.1%.

US stocks rallied Tuesday as a late surge helped regain nearly half of the losses from Monday, when stocks had their biggest plunge in 6½ years.

When financial analysts talk about contagion, they mean when market disturbances spread from one economy or region to affect others. But US stock markets had a phenomenal year in 2017.

'It looks like a little bit of a stabilization trade overnight, ' said John Brady, senior vice president at futures brokerage RJ O'Brien & Associates in Chicago. The Dow soared by 5,000 points - it has never done that in a single year.

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