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Dow rallies after biggest drop in history

09 February 2018

USA market indexes were lower Wednesday.

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

The benchmark Standard & Poor's 500 index is now down 8 percent from the record high it set January 26. Microsoft lost 2.3 percent. By Tuesday, it was once again slightly higher for 2018.

Traders are still braced for more volatility as they try to figure out if the swings of the past week are the start of a deeper correction or just a temporary blip in the USA market's nine-year bull run. But in an example of the bumpy ride Wall Street is on Tuesday, the index quickly gave up some gains was up 341 points at 24,687. US crude oil fell 1.2 percent to settle at $63.39 a barrel, while Brent dropped 1.1% to settle at $66.86. The selling spread to overseas markets.

The Dow Jones industrials are down 500 points, extending the market's losses. On Tuesday it rallied another $5.57, or 15.6 percent, to $41.19.

"This increased volatility had been one that the market was anticipating at the start of the year, but certainly took its time to arrive and may retain a spot in the market after this week's tumultuous turn". "It is now up 187 points so we are back up today". "This is not 2008, when we were really seeing a massive broad-breadth market sell-off".

Wall Street's sharp declines this week have not changed Zaccarelli's view that market fundamentals, including robust corporate earnings, remain supportive of equities.

Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., February 6, 2018. Within the first half-hour of trading, the Dow Jones industrial average fell as much as 567 points and then jumped as much as 367 points. In spite of the recent turmoil though, the Dow is still up 40 percent since Trump's election. The Nasdaq was down 275 points to 6,777, a 3.90 percent decline. The selling has continued this week, worsened by technical factors including the implosion of trading strategies that had bet on low volatility.

Andrew Zimbalist, an economist at Smith College in MA, said the volatility in the United States - and the impact on Asia - was "not surprising in the least" given what's been happening.

The dread that gripped equity markets earlier in the week re-emerged Thursday as US stocks plunged into a correction on concern that rising interest rates will drag down economic growth.

It's been a wild week in global markets. European indexes were down about 2 percent, while Japan's Nikkei lost 4.7 percent.

The losses, which began last Friday, put the benchmark Standard & Poor's 500 index nearly 8 percent below the record high it set two weeks ago. The Nasdaq composite rose 91 points, or 1.3 percent, to 7,058.

The benchmark S&P 500 and the Dow industrials confirmed they were in correction territory, both falling more than 10 percent from their January 26 record highs.

Stocks got hammered on Thursday in another chaotic day of trading.

Investors worry that Treasury yields will rise to levels that make stocks less attractive, and will force the Federal Reserve to fight inflation by aggressively raising interest rates. But the Dow is up 24 percent in the past 12 months and the S&P 500 has gained 18 percent.

Dow rallies after biggest drop in history