Dow plunges 1000 as market enters 'correction'

Dow plunges 1000 as market enters 'correction'

Major indexes in Asia and Europe took steep losses and US markets started sharply lower, only to repeatedly change direction. The S&P 500 fell more almost 40 points to 2,541, and the Nasdaq tanked more than 100 points after coming out of the gate up 1.5 percent from the previous day. South Korea's Kospi, which saw only modest losses on Tuesday, fell back by midday, losing 0.7 per cent to 2,435.05.

The benchmark S&P/ASX200 stock index was down 1.6 per cent after the first half-hour of trade, with every sector trading in the red and the market at its lowest level since October.

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

US crude oil fell 76 cents, or 1.2 percent, to close at $63.39 a barrel in NY. All three major indexes are down on the year.

Stocks had plunged four percent on Thursday, sending the Dow and the S&P more than 10 percent below their record highs on Jan 26 and adding to the sense that rising USA government bond yields had begun a major correction to nine years of near uninterrupted gains for Wall Street. "Is the bond market telling us something we don't know?"

The drop in early trading Tuesday marked the third straight day of steep declines.

Past 5 years growth of XYL observed at 2.80%, and for the next five years the analysts that follow this company is expecting its growth at 12.90%.

Despite the big swings, Tuesday's trading looked similar to the patterns that have shaped the market for the past year: investors bought retailers like Amazon and Home Depot and technology and industrial companies and banks, which do better when economic growth is strong. Bond yields are rising as the Federal Reserve trims its US bond holdings.

Big dividend companies including utility and real estate companies fell, as bond yields increased after a sharp drop on Monday.

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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.

USA stocks rebounded in volatile afternoon trading on Tuesday, with major indexes up more than 1 percent following the biggest one-day drops for the S&P 500 and the Dow in more than six years. Based on a recent bid, its distance from 20 days simple moving average is -2.75%, and its distance from 50 days simple moving average is 0.61% while it has a distance of 13.87% from the 200 days simple moving average. Just after 2 p.m., the Dow had surged back into positive territory and up 60 points.

U.S. equities suffered its second sell-off in a week to hit 2018-lows with the Dow Jones and S&P 500 both entering what is deemed correction territory.

Outside of the U.S.as of Thursday, Japan's Nikkei was in a correction, Germany's DAX was on the cusp of one and the FTSE 100 had dropped 8 percent.

Corrections are seen as entirely normal during bull markets, and even helpful in removing speculative froth and allowing new investors to buy into the market at lower prices. But a steady climb that lasted more than a year has given way to two weeks of shaky selling. Wall Street began shaking last Friday (02/02) after positive U.S. labor market data sparked a spike in bond yields, while climbing USA inflation is feared to trigger new interest rate hikes.

Also Wednesday, US crude oil added 60 cents to $63.99 a barrel in electronic trading on the New York Mercantile Exchange.

The Dow was up 264 points, or 1.1 percent, at 24,122. "The trigger has been the really fast rise in bond yields", said Evan Brown, director of asset allocation at UBS Asset Management.

CURRENCIES: The dollar recovered to 109.42 yen from 108.61 yen late Tuesday.

In other commodities trading, wholesale gasoline remained at $1.77 a gallon. The last bear market was during the 2008 financial crisis.

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