Saturday, 23 February, 2019

Dow Jones Plunge Has Many Investors Jittery

Dow Jones Plunge Has Many Investors Jittery Dow Jones Plunge Has Many Investors Jittery
Nellie Chapman | 09 February, 2018, 06:03

Trump, who has repeatedly praised Wall Street gains during his first year in office, on Wednesday dismissed the recent rout in the markets, saying that stocks should not be falling amid strong economic news.

The Dow Jones Industrial Average fell 19.42 points, or 0.08 percent, to 24,893.35. But on Wall Street, it raises fears that inflation will finally pick up, and that the Federal Reserve will have to raise interest rates faster to fight it. The Nasdaq composite rose 148.36 points, or 2.1 percent, to 7,115.88. The DJIA quickly recovered much of that loss.

Corrections are seen as entirely normal during bull markets, and even helpful in curbing excessive gains and allowing new investors to buy into the market at lower prices.

The same is true of many global markets, where investors have been bracing for a correction while hoping not to see one. Defensive sectors utilities and real estate were the only major S&P groups to end negative.

The dollar gained, while commodities declined after reports of a surge in USA crude production.

Other major USA stock indexes also rebounded Tuesday, with the S&P 500 finishing up 46 points, or 1.7 percent, and the Nasdaq up 148 points, or 2.1 percent.

The decline appears to have been touched off by Friday's unemployment report, which showed that wages grew significantly in January.

However, the local currency has risen by 0.4 per cent against the New Zealand dollar.

Dow Jones Plunge Has Many Investors Jittery

By Wednesday, Asian shares have reversed its previous movement following the move of most US investors to safe-haven assets due to expectations of a jittery market head of the week.

"However once this kind of stampede starts it's hard to stop".

Tokyo led a collapse throughout the region, briefly diving nearly seven percent before closing down 4.7 percent.

Those losses then spread to Asia, where Hong Kong's Hang Seng plunged 5.12% and Japan's Nikkei lost 4.73%. The index bounced off its lowest closing level in two months. All three leading indexes finished lower on Wednesday.

On the last working day of last week, the USA indices recorded their biggest weekly losses for the past two years.

Stephen Schwarzman, the chairman and CEO of financial firm Blackstone, warned recently of a potential "reckoning" in markets. If the stocks are doing well, the markets are referred to as being "up".

"The stock market is up significantly. since President Trump was elected".

"What we're seeing is an attempt at stabilization in USA equity prices following a very sharp selloff", said Peter Kenny, senior market strategist at Global Markets Advisory Group in NY.