x
Breaking News
0

Wall Street plummets; S&P, Dow confirm correction

Stock MarketsFeb 08, 2018 09:24PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A trader reacts near the end of the day on the floor of the New York Stock Exchange in New York

By Lewis Krauskopf

NEW YORK (Reuters) - U.S. stocks plunged around 4 percent on Thursday in another dramatic session, confirming a correction that has thrown the market's nearly nine-year bull run off course.

The bottom of this recent slide remained elusive for investors, who have been whipsawed this week by huge swings that have shaken a market that had only climbed steadily for months.

With Thursday's drops, the benchmark S&P 500 and the Dow industrials confirmed they were in correction territory, both falling more than 10 percent from Jan. 26 record highs. The S&P 500 slumped 3.8 percent on Thursday, while the Dow dropped 4.2 percent as losses accelerated late in the trading day.

The S&P 500 last confirmed a correction in January 2016, when it fell 13.3 percent amid concerns about a slump in oil prices.

The S&P closed below the intraday low it had hit on Tuesday, a key level traders had been watching.

Thursday marked another day of recent sharp swings including the S&P 500's biggest drop in more than six years on Monday that pulled equities away from record highs.

"The dust hasn't settled yet, and I think both buyers and sellers are trying to figure out what this market really wants to do," said Jonathan Corpina, senior managing partner for Meridian Equity Partners in New York.

"I would think that this continues to happen for the next few trading sessions for everything to kind of get flushed out."

The retreat in equities had been long awaited by investors as the market climbed to record high after record high with few bumps. The S&P correction is the fifth of this bull market, according to Yardeni Research. The last bear market was during the 2008 financial crisis.

The sharp selloff in recent days was kicked off by concerns over rising inflation and bond yields, sparked by Friday's January U.S. jobs report, with investors pointing to additional pressure from the violent unwinding of trades linked to bets on volatility staying low.

Since Jan. 26, the S&P 500 has lost $2.49 trillion in market value, according to S&P Dow Jones Indices.

Equities for years have looked relatively attractive compared to the low yields offered by bonds, but the rise in Treasury yields has diminished the allure of stocks, especially with stock valuations at historically expensive levels.

Earlier on Thursday, the 10-year U.S. Treasury note yield (US10YT=RR) rose as high as 2.884 percent, nearing Monday's four-year peak of 2.885 percent, after the Bank of England said interest rates probably needed to rise sooner than previously expected.

"What we're seeing today is continued concerns around interest rates going higher, around valuations in the stock market," said Chris Zaccarelli, chief investment officer with Independent Advisor Alliance in Charlotte, North Carolina.

The Dow Jones Industrial Average (DJI) fell 1,032.89 points, or 4.15 percent, to 23,860.46, the S&P 500 (SPX) lost 100.66 points, or 3.75 percent, to 2,581 and the Nasdaq Composite (IXIC) dropped 274.83 points, or 3.9 percent, to 6,777.16.

All 11 major S&P sectors finished lower, with financials (SPSY) and technology (SPLRCT) the worst-performing groups. All 30 components of the blue-chip Dow finished negative.

Amazon (O:AMZN) and Facebook (O:FB), two of the big stocks that had led the S&P's rally over the past year, were among the biggest drags on Thursday.

After regular cash trading, S&P 500 e-mini futures edged down 0.2 percent late on Thursday.

Thursday's slide put the S&P 500 back into negative territory for the year, down 3.5 percent.

Investors are weighing whether the sharp swings are the start of a deeper correction or just a temporary bump in the prolonged bull market.

A new survey by the American Association of Individual Investors showed the percentage of U.S. individual investors expecting a decline in stock prices has hit a three-month high.

Volatility remained high compared to recent months. The market's main gauge of volatility, the Cboe Volatility Index (VIX), rose 5.73 to 33.46 on Thursday, about three times the average level of the past year.

Equity options trading volume, already elevated this week, is likely to pick up as February contracts approach expiration next week, said Jon Cherry, head of U.S. options at Northern Trust (NASDAQ:NTRS) Capital Markets in Chicago.

"A lot of people have been forced to put on positions that will need to be either wound down or rolled forward," Cherry said.

Thursday marked another session this week with strong volume. About 10.6 billion shares changed hands in U.S. exchanges, well above the 8.2 billion daily average over the last 20 sessions.

Declining issues outnumbered advancing ones on the NYSE by an 8.26-to-1 ratio; on Nasdaq, a 5.58-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 32 new lows; the Nasdaq Composite recorded 24 new highs and 113 new lows.

Wall Street plummets; S&P, Dow confirm correction
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Ghoda Sandrokottos
Ghoda Sandrokottos Feb 08, 2018 9:03PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Up-down up-down goes the clown !
Reply
0 0
Tom OKray
Tom OKray Feb 08, 2018 2:35PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wrong again as the market opened down. These writers don't know *****about the markets.
Reply
2 0
tony ooh
tony ooh Feb 08, 2018 7:19PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
halfway there tom re what they indeed know. empty heads, no hands on, townhouse dwelling, not knowing ***about much.
Reply
1 1
David Beer
David Beer Feb 08, 2018 7:47PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
how so? why do you say they don't know ****?
Reply
0 0
Eloy Rodrigo
Eloy Rodrigo Feb 08, 2018 8:47PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No one can escape the 4 laws
Reply
0 0
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email