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Wall Street dips but trading still volatile

08 February 2018

Wall Street suffered a vicious sell-off in Monday's trading session with the Dow Jones Industrial Average dipping into a correction territory, when the index shed almost 1,600, or 6.3% at one point.

Even so, one couldn't blame investors for forgetting this trend, as the market didn't drop more than 3 percent on a single day all past year. And if the rate creeps above 3%, he expects global investors to buy the bonds in large numbers, pushing the yield back down.

Other technology companies struggled.

At close of trade, Germany's DAX index was down 2.3 percent to 12,392.66 points, while France and the United Kingdom closed 2.4 and 2.6 percent lower, respectively.

"There have been a couple of bad days, [but] if you go back to the day he was elected, we're up by about a third", Hassett said. Companies in the fourth quarter have not just been beating earnings expectations, but about 80% of the companies in the S&P 500 have been reporting better-than-expected sales, which is more than any time in the past five years. "But if you are going to retire in the next two years, you might want to put your money in some more secure places".

Low agreed that the overall economic outlook remained upbeat, but said investors may see more volatility ahead.

The Standard & Poor's 500 index, a broader market barometer tracked by many index funds, climbed 1.7 percent to 2,695.14.

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Earlier this week, stock markets across the world witnessed a sharp fall.

A trader works on the floor of the New York Stock Exchange in New York Feb. 6, 2018.

Japan's Nikkei index and Hong Kong's Hang Seng surged in early trading, then dropped, with the former closing up 0.16 percent and the latter closing down 0.89 percent.

The swoon began Friday as investors anxious that accelerating inflation and higher interest rates could derail the market's record-setting rally.

The 30-stock Dow's early free fall Tuesday briefly pushed it into "correction" territory for the first time in two years after it dropped 10% from its recent record high on January 26.

The sell-off started Friday when generally positive U.S.jobs figures showed strong wage growth, deepening concerns about inflation and possible rate hikes by the Federal Reserve - a "good news is bad news" scenario. And bond yields haven't been this high in years.

There were few signs investors were avoiding stocks entirely.

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Nonetheless, Mnuchin added that "I'm not overly concerned about the market volatility". Experts have been warning that that wouldn't last forever.

The fact that stock markets have largely recovered their poise since Monday's carnage is being viewed by some as proof that the drop was simply a healthy pullback from excessively high values.

Stocks took a huge tumble on Monday, as the Dow plunged nearly 1,175 points, which is the biggest point decline in history during a trading day, Bloomberg reported.

So if you're one of those 14 percent, Warren Buffett, for example, you care a great deal - he lost $5.1 billion on February 5 alone. "Today was a classic risk-off day when so much of the selling is going to be program trades based on technicals".

The last 10 percent drop for markets came in early 2016, when oil prices were plunging as investors anxious about a drop in global growth, which could have sharply reduced demand.

"The sell-off is just a natural response to the moves in the USA", said Richard Jerram, chief economist at the Bank of Singapore. That's less than the 10 percent drop that is known on Wall Street as a "correction". We'll be in a "bear" market if losses reach 20 percent. They were last trading at 2.76 on Wednesday. It fell 76 cents, or 1.2 percent, to close at $63.39 a barrel in New York Tuesday. About 37 percent of USA stocks were held in retirement accounts in 2015, a sharp rise from the recent past. Bond prices did tick higher. The yield on the 10-year Treasury note rose to 2.80 percent from 2.71 percent.

The dollar fell to 109.22 yen from 109.33 yen. The euro dipped to $1.2392 from $1.2399. Apple fell $1.25 to $161.78 and Facebook lost $2.24, or 1.2 percent, to $183.07.

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Like many others, BlackRock analysts described the rout as a buying opportunity, seeing the leveraged products moves as essentially driven by jitters over recent equity gains on one hand, and the possibility of higher interest rates on the other. Chancellor Angela Merkel's conservative Union bloc and the center-left Social Democrats are still in talks about extending their alliance of the past four years. Apple gave up 2.1 percent and Facebook lost 2.8 percent.

Wall Street dips but trading still volatile