Wall Street Snaps Back From Early Losses As Volatility Continues

Traders work on the floor of the New York Stock Exchange as the Dow continued to plunge Monday

Other major indexes closed sharply lower. The Nasdaq lost 274 points, or 3.9 percent, to 6,777. Hong Kong's Hang Seng index lost 2.5 percent.

USA stocks entered a formal correction Thursday, as two weeks of steep losses have cost two major index at least 10 percent of their value.

That was its biggest loss since August 2011, when stocks were reeling as investors were fearful about European government debt and the US had its credit downgraded after the debt ceiling impasse.

On Wall Street, traders took Monday's drop in stride, noting the tremendous changes in the markets since crashes like the one in 1987 that saw the Dow lose almost 23 percent of its value in a single day. It's safe to assume this is a reflection of what's happening on the USA market. "The market always has a tough time when things happen in a linear fashion".

Throughout the turbulence, investors bought companies that do well when economic growth is strongest. Health care, technology and industrial companies took outsize losses and energy companies sank with oil prices.

The DGIA is the average price of 30 stocks traded on the stock market, meant to represent the market as a whole, according to the Washington Post.

United States investors are reacting to changes in the outlook for the American and global economy, and what that might mean for the cost of borrowing.

The Standard & Poor's 500, the benchmark for many index funds, is also 10 percent below the record high it set two weeks ago. The Nasdaq composite gained 0.7 percent.

THE Dow shot up 2% as a rollercoaster session approached its finale yesterday afternoon, rebounding from the huge losses of the prior session and a big drop at the open. On Black Monday Dow plunged by a then-record of 508 points - 22%.

Thursday's 3.8% loss took the S&P 500's decline since its January 26 record past 10%, meeting the accepted definition of a correction. A correction is defined as a decline of at least 10% from a recent peak.

But Lutz noted the market could likely spike again before a correction settles in.

The market is coming off its worst week in two years.

James McBride, an analyst with The McBride Group, said the slump began on Friday as investors anxious higher inflation and interest rates could derail long-running gains. The crash known as "Black Monday" in 1987 saw a drop in the Dow of 508 points.

The U.S. dollar also weakened against the Japanese yen trading at 108.68 yen, down from 109.12 on Monday. The euro dipped to $1.2251 from $1.2263.

The Dow's drop Monday was its biggest in terms of points, but it had a larger percentage drop as recently in 2011.



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