Markets

Wall Street does it again: US stocks fall 4% as sell-off deepens

Wall Street does it again: US stocks fall 4% as sell-off deepens

In Europe, Germany's DAX fell 2.3 percent and the CAC 40 in France lost 2.3 percent. The Pan-European Stoxx 600 was up by 0.67 percent, while London's FTSE was up by 0.45 percent after a few hours of trading.

On Monday, the Dow finished down 4.6 percent while the S&P 500 sank 4.1 percent. South Korea's Kospi, which saw only modest losses on Tuesday, fell back by midday, losing 0.7 percent to 2,435.05.

"While volatility in the markets has eased over the last couple of days, it has remained at very high levels-probably a sign of the ongoing nervousness among investors which may leave markets vulnerable to further declines", Craig Erlam, senior market analyst at Oanda said in a note.

Gold was the only positive sector on the commodity-heavy index on Thursday, as more investors shifted toward the safe-haven asset.

Also Wednesday, Australia's S&P/ASX 200 gained almost 0.8 percent to 5,876.80. The Shanghai Composite Index tumbled 6.0 percent to its lowest since May 2017, and the blue chip CSI300 index dived as 6.1 percent.

It's been a wild week in global markets.

"What we're seeing is an attempt at stabilization in USA equity prices following a very sharp selloff", said Peter Kenny, senior market strategist at Global Markets Advisory Group in NY.

The VIX, a measure of market volatility, jumped 15% on Thursday.

Wall Street anticipates that more government spending will force the Treasury Department to borrow more money by selling additional bonds. The market's main gauge of volatility, the Cboe Volatility Index, rose 5.73 to 33.46 on Thursday, about three times the average level of the past year.

Wall Street recovers, dives as volatility continues
To put that in perspective, investors lost only around $500 billion in stock market wealth in 1987's Black Monday market crash. Declining issues outnumbered advancing ones on the NYSE by a 8.64-to-1 ratio; on Nasdaq, a 6.92-to-1 ratio favored decliners.

The broad-based S&P 500 dropped 100 points or 3.75%, and the tech-rich Nasdaq was down 3.9%.

Australia closed up 0.7 percent.

Gains in industrial and consumer discretionary stocks led advances on the S&P and the Dow.

Today, the Dow dipped below 24,000 for the first time since November.

The Dow Jones industrial average closed more than 1,000 points lower, entering correction territory. A correction is defined as a decline of at least 10% from a recent peak.

"Seen over a longer period the correction in the stock market is relatively small and is likely to have no impact on the macro economy", said Torsten Sløk, chief worldwide economist at Deutsche Bank, in a statement. Or whether it's the correction market watchers have been predicting. The original trigger for the US stock market sell-off was a sharp rise in USA bond yields late last week, after data showed US wages increasing at the fastest pace since 2009.

Trading was 50 per cent higher than average. Copper lost 1.30% to $7,075.85 a tonne. Brent crude, the benchmark for worldwide oil prices, rose 25 cents to $67.11 a barrel in London.

On currency markets the yen, considered a go-to unit in times of turmoil and uncertainty, climbed against the dollar. The euro fell to $1.2280 from $1.2392.


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