January 22, 2019

Dow Plunges Again, Closes Down More Than 1000 Points

10 February 2018, 10:11 | Joann Bryant

The Dow Jones index is headed for its worst week in nine years

The Dow Jones index is headed for its worst week in nine years

However, the falls seen in early trade in Europe were not as steep.

Stocks stumbled in early trading on Wall Street as banks fell following punitive action against Wells Fargo.

The tech-driven Nasdaq was hit hardest, down 0.9 per cent.

Corrections are usually defined as a 10% decline from a recent or all-time high, while a bear market is a more sustained and deeper drop of 20%.

Even with the rebound, this was the worst week for the market in about two years.

Technology, materials and consumer discretionary were the top-performing sectors on Tuesday. It's still up 14 per cent over the past year.

As for the blue-chip Dow Jones index, it also experienced a sharp pullback.

"There are going to be people that are going to be selling into any kind of strength and then you are going to have some value-conscious investors taking advantage of these multiple 100-point drops", said Alan Lancz, president of Alan B. Lancz & Associates, an investment advisory firm in Toledo, Ohio.

USA markets have been under pressure all week, with the Dow notching its biggest loss ever in terms of points on Monday, rallying on Tuesday and finishing modestly lower Wednesday.

US stocks plunged anew on Thursday in another trading session with big swings, as equities remained in a tug-of-war with bond yields, volatility remained high, and investors failed to see a bottom of the market ahead.

The global sell-off began last week after a solid U.S. jobs report fuelled expectations that the Federal Reserve would need to raise interest rates faster than expected, because of the strength of the economy.

Over the past week, stock markets around the world have lost about $US4 trillion from the global sell-off - which is about 44 times more than Bill Gates' total wealth.

The Dow Jones industrial average fell 438 points, or 1.8 percent, to 23,434.

Corrections are normal occurrences during bull markets, and there hasn't been one in two years, an unusually long time.

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

In Tokyo the Nikkei 225 index rose 1.1 per cent.

Australian shares are tipped to open slightly higher today, but with a little volatility. It fell 64 cents the previous session to $61.15.

It also dropped against the British pound (-0.5pc), euro (-0.2pc) and Japanese yen (-1pc). The stock rose 3.27 dollars to 30.18 dollars.

This follows the Reserve Bank of New Zealand's decision to leave interest rates unchanged this morning, as widely expected.

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