Published: Sat, February 10, 2018
Markets | By Rosalie Gross

Experts urge calm during wild ride on Wall Street

Experts urge calm during wild ride on Wall Street

After opening down more than 500 points, the Dow Jones industrial average was up more than 250 points just before 10 a.m. The country's 10-year yield almost surpassed a four-year high of 2.885 percent in the morning trading Thursday, a level that helped trigger a global sell-off in equity markets on Monday.

The pan-European Stoxx 600 index, a gauge of stocks across Europe, ended lower by 1.8 per cent despite having a relatively strong start to the morning.

USA stocks were set to open more than half a percent lower on Wednesday, an nearly 2 percent gain in the previous session failing to calm the nerves which drove Wall Street's biggest intraday fall on record on Monday.

The technology-heavy Nasdaq index was the latest to rack up cumulative falls of more than 10 percent from its peak - the technical definition of when a market is correcting. Investors remain fearful that signs of rising inflation and higher interest rates could bring an end to the bull market and the economic recovery that has boosted stocks in recent years.

The double-digit percentage stock decline has occurred even though Wall Street stresses that the health of the economy, labor market and USA businesses remain strong.

Traders are still braced for more volatility as they try to figure out if the swings over the past few days are the start of a deeper correction or just a temporary blip in the U.S. market's nine-year bull run.

USA equity indexes climbed higher after a rocky start, and the benchmark gauge for US share volatility reversed course after hitting a two-year high.

At 1:17pm ET (1817 GMT), the Dow Jones Industrial Average.DJI was up 64.28 points, or.26 percent, at 24,977.05.

Sharemarket investors had another nervous day on Friday, with the NZX50 closing down 1 per cent on the back a steep drop in United States stocks overnight on Thursday.

The S&P 500 and Nasdaq indexes also experienced continuing decline, each dropping 3 percent.

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Economists say it would take a much bigger stock market move than Monday's plunge to change that.

Analysts cited higher Treasury bond yields as the catalyst for the drop, coupled with the view that the market surged to unsustainably high levels in December and January in the euphoria over U.S. tax reform.

On Wall Street the recent turn of events is being called a "correction", but some fear they could be a harbinger to a bear market, loosely defined as a time when prices are falling and sellers outnumber buyers.

CNN-For the second time this week, the Dow plunged more than 1,000 points.

After regular cash trading on Wednesday, S&P e-mini futures fell 1 percent, suggesting the negative tone would continue on Thursday.

After the stock market crash of 1987 and another big decline in 1989, the New York Stock Exchange put automatic limits on trading.

On Monday, the Dow finished down 4.6 percent while the S&P 500 sank 4.1 percent, to 2,648.94. The euro was up 0.3 percent at $1.2435 while the dollar rose 0.3 percent to 109.38 yen.

The Federal Reserve combats inflation by raising its interest rates.

Rising yields continued to be a factor causing losses in USA market indexes. chief financial analyst Greg McBride said, "When the market declines sharply, everyone naturally wonders, 'What's wrong?' Nothing is wrong economically".

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