U.S. stocks plunge again; market in correction territory

“While volatility in the markets has eased over the last couple of days, it has remained at very high levels – probably a sign of the ongoing nervousness among investors which may leave markets vulnerable to further declines”, Craig Erlam, senior market analyst at Oanda, said in a note. For now, the markets remain in the “drop” phase as the S&P 500 closed below 2,600 for the first time since November 22.

Overnight the Dow Jones index rose 2.3 per cent, the technology-heavy Nasdaq gained 2.1 per cent and the S&P 500 index advanced by 1.7 per cent.

The S&P 500 also suffered, plummeting 101 points to finish at 2,581.

ASX futures have dropped by 64 points, or 1.2 per cent, which points to a steep tumble for Australian shares this morning. The Nasdaq composite rose 148.36 points, or 2.1 percent, to 7,115.88.

The Standard & Poor’s 500 index gave up 77 points, or 2.9 percent, to 2,603.

Year to date, the Dow is down 1.5 percent and the S&P 500 is down 1.3 percent.

The markets have been marked by increased volatility since last Friday, when the Labor Department announced that workers’ wages few at a fast rate in January.

China’s stock market benchmark has fallen as much as 5.5 percent after the sharp sell-off on Wall Street.

Investors fear that low unemployment, increasing USA growth and rising wages will spur the Federal Reserve to raise interest rates, which would boost the cost of borrowing money.

United States stocks ran out of steam on Wednesday after an early surge, in a sign that investors are still spooked by the market’s recent retreat and wary more fallout is to come.

Bond yields in the USA have also risen in recent weeks, typically a signal of higher rates.

“This is going to take longer to work out than people expect”, he said.

After the market’s big gains in 2017 and early 2018, stocks were overdue for a drop, said David Kelly, the chief global strategist for JPMorgan Asset Management. The S&P 600 Index closed at 918.54 for a gain of 0.13 points or 0.01%. Brent crude, the global standard for oil prices, gave up 70 cents, or 1.1 percent, to $64.81 per barrel in London.

The losses, which began last Friday, put the benchmark Standard & Poor’s 500 index nearly 8 percent below the record high it set two weeks ago. Spot gold was down 1.0% at $1,326.51 an ounce.

Bond prices have plummeted and yields spiked on concerns an uptick in inflation forecasts might push the Federal Reserve to act faster in tightening monetary policy than Wall Street had expected.

Japan’s Nikkei 225 average lost 2.8 percent to 21,240.05 in early trading Friday.

In Europe, Germany’s DAX fell 2.3 percent and the CAC 40 in France lost 2.3 percent.

Emerging market stocks lost 0.24 percent.