Published: Wed, February 07, 2018
World News | By Laverne Osborne

U.S. stock market plunges again, then recovers as wild ride continues

U.S. stock market plunges again, then recovers as wild ride continues

USA stock futures pointed to a third day of losses at the opening on Tuesday, deepening a correction to the stock market's long-running rally that saw the biggest intraday fall in history for the Dow Jones Industrial Average on Monday.

Major indexes in Asia and Europe also fell following Monday's 1,175-point drop in the Dow Jones industrial average.

It heralded the start of a correction rather than a crash, experts said, with investors betting on low market volatility getting their fingers burned as the so-called Vix measure of volatility hit levels not seen since 2011.

"Despite violent moves in the last couple days in the market, fundamentals in the economy are very strong and it's not just the USA, it's throughout the global economy", Alicia Levine, head of global investment strategy at BNY Mellon Investment Management in NY.

The pan-European FTSEurofirst 300 index lost 2.50 percent and MSCI's gauge of stocks across the globe shed 0.54 percent.

"The writing was on the wall for a pullback", he said, noting that since Trump's election in November 2016, the Dow Jones industrial average had soared 42 percent through its high at the end of January. If you have money in the market, view it as a long-term investment that over the long run, will grow.

USA stocks fell in volatile trading on Tuesday, as a pullback from record highs steepened following the biggest one-day declines for the S&P 500 and Dow in more than six years. The Nasdaq was up roughly 20 points about 15 minutes after open, while S&P only lost a single point at the time.

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Emerging market stocks lost 2.51 percent.

"It doesn't look like people are working their orders - the programs are trading this", Dan Ryan, who works on the New York Stock Exchange floor for E&J Securities, said as he was leaving work for the day. The British FTSE 100 index fell 2.6 percent. It has been an uncommonly long time since the last market correction, which ended nearly two years ago.

US stocks are lower at midday as banks fall following more punitive action against Wells Fargo. Average hourly earnings, which had been rising at a modest 2.5 percent in the recovery, increased by 2.9 percent from the year before, the Labor Department said on Friday. Friday's report showed wages grew at a faster pace in January, and investors anxious that that means inflation is speeding up, and that the Federal Reserve will have to raise interest rates faster than previously expected in order to keep that inflation in check. Exxon Mobil (XOM) fell 3.5 percent. Brent crude, the standard for global oil prices, lost 96 cents, or 1.4 percent, to $67.62 a barrel in London.

Bond prices rose. The yield on the 10-year Treasury fell to 2.73 percent. Copper rose 3 cents to $3.22 a pound.

Banks fared the worst as interest and bond rates fell.

Wall Street fell precipitously in the week after the attacks, with the Dow sinking 7.1 percent, or 684 points, on September 17-the first day trading resumed.

Commodities remained gloomy, with oil and industrial metals all falling as the year's stellar start for risk assets rapidly soured. Hong Kong's Hang Seng skidded 5.1 percent and South Korea's Kospi declined 1.5 percent.

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