Published: Сб, Февраля 10, 2018
Markets | By Noel Gibbs

Dow Jones industrial average closes up more than 560 points

Dow Jones industrial average closes up more than 560 points

The Dow finished with a decline of 1,033 points, the second-worst in history, eclipsed only by Monday's 1,175-point plunge. The S&P 500, the index that investors pay the most attention to, is in a correction, down 10.2 percent from its recent high.

The Dow Jones Industrial Average plummeted 4.2 per cent to 23,860.46 yesterday.

"The mood on the floor is relief", said FTN Financial chief economist Chris Low, adding that the Dow's "violent" descent on Monday - at one point losing 700 points in a few minutes - would not soon be forgotten. But a stock market accustomed to a steady climb for more than a year and half as given way to two weeks of shaky selling. "They could be in full panic mode right now".

The pullback came amid another spurt higher in Treasury bond yields, a focal point for investors concerned that the Fed may accelerate rate hikes if inflation rises suddenly.

"The S&P 500 hasn't moved into correction mode this quickly, ever", said Lindsey Bell, investment strategist at CFRA Research. Asian shares have opened lower and are tracking the overnight plunge on Wall Street.

Here's what you need to know about what's going on with the stock market. Germany's DAX lost 2.6 percent while France's CAC 40 ended down 2 percent.

The S&P 500 rose 38.55 points, or 1.5 percent, to 2,619.55.

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The treasury secretary, Steven Mnuchin, said he was not "overly concerned about the market volatility".

In other words, the 2018 stock sell-off was mainly driven by catalysts that have little to do with the strong economic health driving the bull market's run.

US stocks posted sharp gains in another wild trading session on Tuesday, as indexes rebounded from the biggest one-day drops for the S&P 500 and the Dow in more than six years that stalled the market's record run. Neither index has closed in a correction in two years. But on Wall Street, it raises fears that inflation will finally pick up, and that the Federal Reserve will have to raise interest rates faster to fight it.

The Bank of England strengthened its economic forecast Thursday and announced that it will likely have to raise interest rates both earlier and higher than it expected in November.

Ryan Detrick, of LPL Financial, said: "The bond market has definitely got the stock market's attention". The Russell 2000 index of smaller-company stocks gave up 5 points, or 0.3 percent, to 1,485. That combination usually carries stocks higher.

The market performance also reflects the strong USA and global economies, which have boosted corporate profits.

"Although there are a couple of things in the way of flawless scenarios, that being interest rates and bond yields and what not, people are still looking at equities as a good investment and they still believe that there is going to be continued upside", said Peter Costa, president of trading firm Empire Executions in NY.

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