U.S. stocks enter correction territory after plummeting second time in a week

U.S. stocks enter correction territory after plummeting second time in a week

Earlier in the day it had dropped by 500.

Aside Dow, other major stock indexes also tumbled.

The Dow Jones Industrial Average fell by more than 1,000 points for the second time this week, plunging 4.15% to 23,860. Investors remain fearful that signs of rising inflation and higher interest rates could bring an end to the bull market that has sent stocks to record high after record high in recent years.

On Wall Street, many companies that rose the most over the past year have borne the brunt of the selling.

Thursday's declines mean the Dow and S&P 500 have now fallen by more than 10% from the record highs set in January, a threshold analysts call a correction.

Among the biggest fallers Tuesday was Tokyo's Nikkei 225 stock average, which ended 4.7 percent lower at 21,610.24, having earlier been down a massive 7 percent.

With hope for a market rebound, traders began to sell off, especially after Wall Street opened with a drop of 547 points or 2.25 percent, but soon clawed back to be up 1.4 percent within hours. And the NASDAQ closed 275 points lower, at 6,777.

It follows the Dow's almost 1,200 point slide Monday, 500 point rebound Tuesday, and mild 19 point drop Wednesday. At the close, the company's shares rose 2.27 percent to close at 11.25 dollars apiece. The S&P 500, for example, has fallen 7.8 per cent since it set its latest record high on January 26.

Even the most bullish of market strategists will say a correction is ultimately healthy for a market because it removes some of the froth and speculation. Major indexes in Asia and Europe Tuesday took steep losses and United States markets started sharply lower, only to repeatedly change direction.

The biggest losses went to high-dividend companies including utility and real estate companies, as bond yields increased after a sharp drop on Monday.

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US stocks tumbled again Thursday as investors continued to fret about the possibility of rising inflation and higher interest rates.

About 10.5 billion shares changed hands in USA exchanges, well above the 8.2 billion daily average over the last 20 sessions.

Despite the turbulence, Tuesday's trading looked similar to the patterns that have shaped the market for the past year: investors bought companies that do well when economic growth is strongest. "Stocks won't bottom until long term Treasuries rally hard".

"However once this kind of stampede starts it's hard to stop". This is the lowest level for this average since March 10, 1973 when it was 222,000. South Korea's Kospi had declined 1.5 percent. The more domestically focused FTSE 250 has gained 1.3 per cent, while the broader FTSE All Share index is up 0.8 per cent.

Volatility returned to markets on Thursday as USA indices finished the day sharply lower, plunging them into correction territory.

Stephen Schwarzman, the chairman and CEO of financial firm Blackstone, warned recently of a potential "reckoning" in markets.

"This has been the most overbought situation since the financial crisis 10 years back", he said. Such a rapid rise is unusual, and market analysts long warned that a pullback was overdue.

There's a psychological aspect to crashes, as people join the rush to get out of the market, fearing that things are only going to get worse.

Several Dow members lost more than 5 per cent, including American Express and Home Depot.

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