Stocks take another tumble, Dow dives more than 1000 points

Financial Markets Wall Street

Financial Markets Wall Street

The market's main gauge of volatility, the Chicago Board Options Exchange (CBOE) Volatility Index, fell to 29.82 on Thursday, more than twice what it was a week ago but down off a two-and-a-half year high above 50 points hit on Tuesday. The current bull market has run on for almost nine years now, making it the second longest in history.

While the more than 1,000 point tumble in the Dow Jones industrial average led the market lower, the US dollar's weakening against the Japanese yen also hurt export manufacturers' shares.

The S&P 500 also suffered, plummeting 101 points to finish at 2,581.

The Nasdaq composite lost 212 points, or 3 percent, to 6,838. The Nasdaq shed 274.82 points, or 3.90, to close at 6,777.16. It's down 83.48 points, or 5.4 per cent, for the week.

The broader S&P 500 lost 34 points, or 1.3 percent, to 2,647.

The markets have been marked by increased volatility since last Friday, when the Labor Department announced that workers' wages few at a fast rate in January.

Stocks have failed to hold a strong rebound since Friday, when a better-than-expected report on wages added to worries about higher USA inflation. Many market watchers have predicted a pullback for some time, saying stock prices have become too expensive relative to company earnings. Those stocks are often seen as substitutes for bonds because they tend not to fluctuate that much in price and provide steady income.

Meanwhile, the sudden cratering of stock prices, rising bond rates and fierce volatility have been a stark reminder that Trump, like his predecessors, isn't commander in chief of the US economy, the Associated Press explained.

The 10-year Treasury bond also reached a four-year high of 2.88 percent on Thursday, bringing about concerns of rising inflation.

The decline continues a market correction off an overheated January, according to market professionals.

It is now just over two years now since the Workplace Relations Commission was created following the amalgamation of five organisations dealing with workers rights. "The high valuation is going to be more of a challenge, given rising rates", said Stephen Wood, chief market strategist, North America for Russell Investments. Brent crude gave up 70 cents, or 1.1 percent, to $64.81 per barrel. The April gold bullion contract was up US$4.40 to US$1,319.00 an ounce.

Japan's Nikkei 225 index based in Tokyo was down 4.7% when it closed Tuesday after a rollercoaster day.

Sparking the turbulence was a report released last week showing that hourly wage growth rose at its fastest pace since 2009. The selling then moved to Europe, where Britain's FTSE (-2%), Germany's DAX (-2.44%), and France's CAC (-2.57%) are all under pressure.

Emerging market stocks lost 0.24 percent.

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