Dow plunges more than 1,000 points as the week-long market rout continues
So far this week the Dow is down a total of 1,660.50 points; the S&P 500, the Nasdaq Composite and the Russell 2000 also closed down
Stocks plunged again Thursday, and for the second time in four days, the Dow Jones Industrial Average slumped more than 1,000 points.
The Dow and the S&P 500 index are now 10 per cent below the record highs they reached just two weeks ago.
The massive drop is regarded as a correction for the bull market – the first in two years, an unusually long time.
The Dow Jones Industrial Average sank a total of 1,032.89 points, or 4.1 per cent, to 23,860.46 – bringing the week’s total down by 1,660.50 points, or 6.5 per cent.
The S&P 500 index skidded 100.66 points, or 3.8 per cent, to 2,581. It’s down 181.13 points, or 6.6 per cent, for the week.
The Nasdaq composite tumbled 274.82 points, or 3.9 per cent, to 6,777.16, bringing its weekly loss to 463.79 points, or 6.4 per cent.
And the Russell 2000 index of smaller-company stocks dropped 44.18 points, or 2.9 per cent, to 1,463.79. It’s down 83.48 points, or 5.4 per cent, for the week.
In the year so far, the Dow is down 858.76 points, or 3.5 per cent; the S&P 500 is down 92.61 points, or 3.5 per cent; the Nasdaq is down 126.23 points, or 1.8 per cent; and the Russell 2000 is down 71.72 points, or 4.7 per cent.
After huge gains in the first weeks of this year, stocks tumbled after the Labour Department said workers’ wages grew at a fast rate in January.
That’s good for the economy, but investors worried it will hurt corporate profits and that rising wages are a sign of faster inflation.
It could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy.
High-dividend stocks including phone companies fell. Those stocks are often seen as substitutes for bonds because they tend not to fluctuate that much in price and provide steady income.
Those stocks fall out of favour when bond yields rise, as they have been for the past few months, and many expect the trend to continue. The yield on the 10-year note was as low as 2.04 per cent as recently as September.