Wall Street gains as volatility eases, Dow up over 200 points

The New York Stock Exchange

High-dividend stocks including phone companies fell. Investors could be wary of investing in stocks seeing the rise in long-term USA yields as well as a significant surge in stock market volatility. The Nasdaq has lost 9.7 percent of its value in the same span, falling short of the 10 percent threshold that defines a stock correction.

And the Russell 2000 index of smaller-company stocks dropped 44.18 points, or 2.9 per cent, to 1,463.79.

The Dow and the S&P 500 index are now 10 per cent below the record highs they reached just two weeks ago.

Boeing (BA.N) and United Tech (UTX.N) rose about 1.5 percent, providing the biggest boost to the Dow, while Amazon's (AMZN.O) 1 percent rise helped lift the S&P. The Dow is up 24 percent over that time, the S&P 500 18 percent.

ASX futures have dropped by 64 points, or 1.2 per cent, which points to a steep tumble for Australian shares this morning.

The danger for stock market investors is that means the Federal Reserve - and other major central banks - reining in the vast supplies of cheap funds they have pumped into the global economy since the 2008-09 financial crisis. It has been an uncommonly long time since the last market correction, which ended nearly two years ago.

He said it seemed that markets appeared to rally as soon at the European stock markets closed around 11:30 a.m.

"People will be afraid now of shorting volatility".

The pullback came amid another spurt higher in Treasury bond yields, a focal point for investors concerned that the Fed may accelerate rate hikes if inflation rises suddenly.

Investors anxious rising wages will hurt corporate profits and could signal an increase in inflation that could prompt the Federal Reserve to raise interest rates at a faster pace, putting a brake on the economy. Higher rates act like a brake on the economy by slowing down borrowing and lending. Several financial experts say the fall this week should be seen as a correction, not a crash. Experts do think the global economy will keep growing this year even though that is likely to bring more inflation.

"Now that everybody is on edge, you're going to see the volatility swing in both directions", Reuters quoted Lancz as saying.

From Election Day to the record high on January 26, the Dow climbed more than 8,000 points - a remarkable 45%. Extreme fear drove the Dow down by a record 1,175 points on Monday.

The S&P energy index was up more than 1 per cent, led by Anadarko Petroleum's 5 per cent gain and an uptick in oil prices.

World stocks were also on track for their worst week since 2011, knocked by a 4 percent decline in Chinese stocks. Germany's DAX was down 1.9 per cent at 12,445.

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