Dow, S&P 500 dip amid volatility in U.S. stocks

Dow, S&P 500 dip amid volatility in U.S. stocks

Dow, S&P 500 dip amid volatility in U.S. stocks

This drop is the biggest since the day after the UK Brexit vote.

The Dow finished with a decline of 1,033 points.

"The primary culprit was higher-than-expected wage growth in the January jobs report, which may have increased fears that the Federal Reserve would be more aggressive with interest rate hikes in 2018", according to LPL.

The Dow Jones industrial average fell as much as 567 points shortly after the opening bell, then jumped as much as 367 points in the first half-hour of trading.

While Wednesday's trading lacked the wild swings of the prior two sessions, the Dow industrials moved in a roughly 500-point range, more than three times the average daily swing over the past year.

In other news, the Treasury Department auctioned $24 billion in 10-year notes at a high yield of 2.811.

After the end of regular trading on Tuesday, S&P 500 e-mini futures were down 0.4 percent. Monday's losses came on top of Friday's 666-point drop in the blue-chip index, which resulted in the worst week for the index in two years.

Since 2011, the S&P 500 Index has roughly tripled.

"Preceding this market volatility, we had a 394-day period when the S&P 500 didn't go down 5 percent or more, which set an all-time stock market record", said John Hagensen of Keystone Wealth Partners, in Chandler, Ariz.

Wall Street has been on a roller coaster ride.

Many financial professionals say this sell-off is healthy for the market.

Torsten Slok, chief worldwide economist at Deutsche Bank, told the Financial Times: "Markets are coming to the conclusion that the USA economy is close to overheating and therefore that the risks of inflation are bigger than the risks of a recession". Technology and industrial companies and retailers moved higher, a possible sign of confidence the U.S. economy will keep growing.

Those include worries about a potential rise in US inflation or interest rates and whether budget disputes in Washington might lead to another government shutdown. Those stemmed from the United States jobs report on Friday (Saturday NZT).

Hitting those support levels would represent an 11% correction for the S&P and a 15% selloff for the Dow from their January 26 all-time highs. Some also question the possible role of computer-driven algorithmic trading in the precipitous declines or even the ramifications of the rise and fall in the value of virtual currencies, notably bitcoin.

"As quickly as the market fell, it recovered much of the ground it had lost as investors remembered the economy and corporate earnings remain strong", he added.

"However once this kind of stampede starts it's hard to stop". The Dow closed down 4.6 percent and turned negative for the year. Tokyo's Nikkei 225 was off 3.2 percent at 21,180.28 and Hong Kong's Hang Seng fell 4.2 percent to 29,142.87.

The FTSE 100 fell 1.5% after the Bank warned rates could head upwards sooner and faster than previously thought.

Additionally, Senate leaders announced that they had reached a two-year budget agreement Wednesday afternoon.

Coupe said the volatility is coming about because investors are having difficulty deciding between stocks and bonds at the moment.

"Today's market action is a classic of a market that has searched for a bottom", said Peter Cardillo, chief market economist at First Standard Financial In New York, who predicted a rebound back to record levels.

"Now that everybody is on edge, you're going to see the volatility swing in both directions", Lancz said.

Monday's decline was 4.6%.

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