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

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

The Dow Jones industrial average rose as much as 510 points. The Nasdaq was down 275 points to 6,777, a 3.90 percent decline.

After huge gains in the first weeks of this year, stocks tumbled Friday after the Labor Department said workers' wages grew at a fast rate in January. The Nasdaq slumped nearly 1%, while the S&P 500 fell modestly.

On Thursday, the Dow Jones Industrials and S&P 500 indexes slumped more than 10 percent from their January 26 record highs, and volatility that plagued the market all week left investors wondering when the market's recent slump would find a floor. The decline on Wall Street picked up steam on Monday, with the Dow plummeting 1,175 points.

In and of themselves, corrections aren't something for investors to panic about, according to experts.

The question for investors is whether the turbulence is a sign that the long bull market is over.

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Bank of America Merrill Lynch calculates that there have been 25 bear markets in America since the biggest one of them all in 1929 at the start of the Great Depression.

All major sectors were down Thursday, with technology, real estate and financials leading the plunge, signaling investor unease around interest rates and the prospect of higher inflation. On Tuesday it rallied another $4.12, or 11.6 percent, to $39.74.

It was the Dow's second steep drop this week, as the stock market's sell-off deepened.

United States 10-year yields were at 2.789 per cent, up from 2.766 per cent on Tuesday. Rising yields have made bonds more appealing to some investors compared to stocks. A pickup in inflation could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy. A very crowded trade, it just took a while to unwind that", said John Lynch, Chief Investment Strategist at LPL Financial (Frankfurt: "A1JZ6S - news) in Charlotte, North Carolina. The markets have been unusually calm since late 2016, and he said investors were betting that would continue.

Stocks in Europe declined and bond yields increased after the Bank of England said could raise interest rates in coming months because of the strong global economy.

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In fact, corrections are fairly common - they happen on average once a year on the Dow Jones, according to USA fund manager Grayeli Investment Management. And they can fall when economies are picking up speed and life, for many people, is getting better.

US crude oil fell 76 cents, or 1.2 percent, to close at $63.39 a barrel in NY.

The Standard & Poor's 500 index was up 12 points, or 0.5 percent, at 2,662. Heating oil dipped 3 cents to $1.99 a gallon. His promises for big corporate tax cuts helped lift the Dow more than 8,000 points, though it has since given back about a fifth of that surge.

Do you think Dow Jones volatility can mirror that of cryptocurrency markets?

The market's main gauge of volatility, the CBOE Volatility Index, opened at a relatively elevated 32.18 on Friday, almost three times what it was a week ago but lower than a two-and-a-half-year high of 50.30 points hit on Tuesday. American Express and Intel were the two biggest losers on the Dow. Asian stock markets endured another disappointing session in general, with Hong Kong's Hang Seng down 0.9 per cent at 30,323.30 while Japan's Nikkei 225 stock average closed up 0.2 per cent at 21,645.37. Britain's FTSE 100 fell 1.5 percent and the French CAC 40 lost 2 percent.

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