Febrero 19, 2018

U.S. stocks enter correction territory after plummeting second time in a week

10 Febrero 2018, 08:21 | Dolorita Barahona

REUTERSAmerica’s biggest industrial stock market index took a turn for the worse

Dow Jones drop crash

On Thursday, the Dow Jones Industrials and S&P 500 indexes slumped more than 10 percent from their January 26 record highs, and volatility that plagued the market all week left investors wondering when the market's recent slump would find a floor.

The S&P 500 also suffered, plummeting 101 points to finish at 2,581.

The benchmark FTSE 100 share index fell 39.59 points, or 0.6%, to 7,131.10.

In the United States, the Dow Jones ended Thursday's trading session 4.2% lower at 23,860, and the wider S&P 500 index closed down 3.8%. The broader S&P 500 index closed up 38 points, or 1.5 percent, at 2,620 and the Nasdaq finished up 97 points, or 1.4 percent, at 6,874. The Dow, which booked a record-breaking loss of 1,175 points Monday, has shed roughly 2,700 points since Friday amid a brisk retreat from all-time highs.

The markets could continue to trend higher if U.S. Treasury yields remain in a holding pattern.

Earlier, the Shanghai Composite Index had tumbled as much as 6.0 percent to its lowest since May 2017, and the blue chip CSI300 index dived 6.1 percent.

Asian markets saw hefty falls overnight, while in the USA on Thursday the Dow Jones fell by more than 1,000 points for the second time this week.

"Global markets are breathing a huge sigh of relief after a late rally in USA stocks yesterday", currency analysts at ING wrote in a report on Wednesday.

Do you think Dow Jones volatility can mirror that of cryptocurrency markets?

What is a stock market correction?

Investors are likely skittish because the prospect of increased inflation may force the Fed to raise interest rates faster than expected.

Stocks began to fall in early trading and their losses grew throughout the day.

The Canadian market was in negative territory, but off its lows for the day, as oil prices fell and Statistics Canada released disappointing jobs data. Brent crude, the global standard for oil prices, gave up 70 cents, or 1.1 percent, to $64.81 per barrel in London. Brent crude, used to price global oils, lost 51 cents to $64.33 in London. Because it results in higher borrowing costs, slows growth, makes bonds a more attractive investment alternative compared to stocks and makes today's corporate earnings less valuable in the future. The reduction in points was the largest since the 2008 financial crisis, but, percentage-wise, was not as significant.

World stocks were also on track for their worst week since 2011, weighed down by a 4 percent drop in Chinese stocks.

In Europe, equity markets were once again a sea of red, with the German index, the Dax, closing down nearly 1.7 per cent in Frankfurt, the French Cac 40 finishing 1.85 per cent lower and London's blue-chip FTSE 100 index 1.3 per cent lower.

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