Dow Jones industrials plunge 1000 points

Markets Right Now Asian markets track plunge on Wall Street

Ten-year Treasury yields fluctuated near their four-year highs, while the yen found traction as a haven from the stock turmoil.

At 12:32 p.m. ET (1732 GMT), the Dow Jones Industrial Average .DJI was up 274.21 points, or 1.1 percent, at 25,186.98.

As CNNMoney put it, "Fears about the bond market, inflation and interest rates seized investors again".

The Dow Jones industrial average jumped as much as 510 points.

On Monday, the Dow lost 1,175 points, its largest point-decline on record before gaining 560 points on Tuesday in a snapback rally.

The Dow posted a 2.3% increase, its biggest daily percentage gain since January 29, 2016, while the S&P 500 rose 1.7%, its biggest one-day gain since November 7, 2016, the day before the election of Donald Trump as president.

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.

"History suggested the S&P 500 was overdue for a pullback: 404 trading days had elapsed since the market last experienced a 5 percent drawdown, the longest stretch of time in almost 90 years!"

Trading has been turbulent all day.

Trading was 50 per cent higher than average.

With Thursday's losses, the Dow and S&P 500 have now fallen more than 10 percent from their peaks, meeting the official definition of a "correction" in financial parlance and marking an about-face from the bullishness of early 2018. The yield on the 10-year note was as low as 2.04 percent as recently as September.

Corrections are seen as entirely normal occurrences, and the market, now in its second-longest bull run of all time, has not seen one in two years, an unusually long time. 2017, you'll recall, was one of the least-volatile years on record. As a result, the biggest losses went to high-dividend companies such as utility and real estate companies whose stocks become less appealing than bonds to investors seeking income.

On Wall Street, all but two S&P 500 index sectors ended higher, with economically sensitive materials, technology and consumer discretionary indexes posting the biggest gains.

Australia's S&P/ASX 200 was up 1.0 percent at 5,889.60.

The market mood turned decidedly fearful the last two days.

Equity investors are anxious the likelihood of a stronger U.S. economy and higher inflation could lead the Federal Reserve to boost interest rates more times than previously anticipated. It could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy. "It's rising yields and inflation worries", said Chuck Carlson, chief executive officer at Horizon Investment Services, in Hammond Indiana. The markets have been unusually calm since late 2016, and he said investors were betting that would continue.

"People were positioned for more central bank easing or continued central bank easing, low rates, and importantly, low volatility", he said. "Corrections are caused by people having to reposition for new environments". That's good for the economy, but investors anxious it will hurt corporate profits and that rising wages are a sign of faster inflation.

The market's main gauge of volatility, the CBOE Volatility Index, fell to 26.18 on Thursday, still more than twice the level it held over the past few months. US crude oil fell 1.2 percent to settle at $63.39 a barrel, while Brent dropped 1.1% to settle at $66.86. US crude fell 2.5 percent to settle at $61.79 per barrel and Brent dropped 2 percent to $65.51.

Wholesale gasoline lost 4 cents to $1.81 a gallon. Heating oil lost 1 cent to $1.92 a gallon.

The large share of foreign trading activity in Japan and some other regional markets raised the likelihood that losses seen in the USA may spill over into other regions. South Korea's Kospi, which saw only modest losses on Tuesday, fell back by midday, losing 0.7 percent to 2,435.05. That should please shareholders, until they remember that the blue-chip index shed nearly 200 points on Tuesday, hitting a 10-month low.

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

Spreadbetters expected Europe markets to start lower, forecasting an 0.8 percent drop for FTSE, and declines of 0.2 percent for Germany's DAX and France's CAC. The March copper contract was down one cent to US$3.08 a pound. The euro was trading at $1.2384.



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