Stock markets plunge, Dow and S&P 500 in 'correction'

Wall Street recovers dives as volatility continues

Stock markets plunge, Dow and S&P 500 in 'correction'

In what's been a historically volatile week for markets, each of the major US averages lost more than 3.7% in trading on Thursday with the Dow's 4.15% decline - which was good for a 1,032-point loss - leading markets lower. Do not forget to update your bookmarks.

Analysts and traders say the sell-off had begun a major correction to nine years of near uninterrupted gains for Wall Street.

While Wednesday's trading lacked the wild swings of the prior two sessions, the Dow industrials moved in a more than 500-point range, more than three times the average daily swing over the past year. However, a flight to safety away from stocks and back into government bonds knocked the 10-year back down to 2.82% by early afternoon.

Wall Street tumbled back into sell-off mode Thursday (Feb 8), with the Dow plunging more than 1,000 points as worries over interest rate hikes continued to drag the market down.

In Toronto, the benchmark S&P/TSX composite index declined by 265.03 points or 1.73 per cent, closing at 15,065.55.

US Treasury yields, which helped trigger the violent downturn in equities this month, remain around four-year highs.

The Cboe Volatility Index rose again on Thursday to as high as 34.54, which is more than twice as high as its recent, unprecedented lows, having suffered its biggest-ever one-day spike on Monday.

The dread that gripped equity markets earlier in the week re-emerged Thursday, Feb. 8, as USA stocks plunged on concern that rising interest rates will drag down economic growth.

The Dow and S&P 500 capped off their worst weekly performance in two years last week after a stronger-than-expected jobs report sent interest rates higher.

The Dow closed down 666 points, or 2.5 percent - the largest percentage decline since the tumult surrounding Brexit in June 2016. It was the second-worst single-day point drop in history, beaten only by the record set after this Monday's 1,175-point drop.

The S&P 500 shed 58 points, or 2.2 percent, to 2,620 as of 1 p.m.

The broader based S&P 500 closed down over 13.52 points at 2,681. The Nasdaq rose 69 points, or 1 per cent, to 6,847.

United States stocks had plunged around 4 per cent on Thursday in another dramatic session, confirming a correction that has thrown the market's almost nine-year bull run off course.

Other Asian share indexes also were lower, with Hong Kong's Hang Seng down 4.3 percent and Japan's Nikkei 225 3.2 percent lower. After the bill was passed, the Dow raced to record highs, hitting 26,616.71 on January 26.

Higher yields tend to hurt equities because they increase borrowing costs for companies and ultimately consumers. To get there on Thursday, the S&P would have to fall to 2,333.

"It was volatile all day, crossing the line between gains and losses more than 20 times", NPR's John Ydstie reported.

She said: "This whole correction is really about rates". "Is the bond market telling us something we don't know?"

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