Published: Wed, February 07, 2018
Global | By Enrique Rogers

Wild journey continues for North American shares in risky buying and selling

Wild journey continues for North American shares in risky buying and selling

The Dow Jones industrial average fell another 500 points as the stock market opened Tuesday.

On its way there, the Dow took several harrowing turns during the day, opening with a plunge of 567 points - coincidentally, the exact same amount it wound up gaining at the closing bell. That was its biggest loss since August 2011, when stocks were reeling as investors were fearful about European government debt and the US had its credit downgraded after the debt ceiling impasse.

"The market clearly hasn't decided what the sentiment for the day is", said Janna Sampson, co-chief investment officer at Oakbrook Investments LLC in Lisle, Illinois.

On October 28, 1929, the Dow fell 12.8 percent, or 38.33 points, the height of the worst financial panic Americans had ever seen, feeding into misery that would last for years. The Dow is up 24 percent over that time, the S&P 500 18 percent. The stock market has been unusually calm for more than a year.

Even after Tuesday's gain, the S&P 500 is still down 6.2 percent from the recent record high it set on January 26.

Broadridge Financial slipped 0.62 cents or 0.53 percent as of 11:30 a.m., after taking the biggest beating among Long Island-based firms as of the market's close the prior day when it tumbled $4.03, or 4.25 percent.to about $91.

A 10 percent drop from a peak is often referred to as a "correction" while a bear market is generally defined as a 20 percent or so drop in indexes.

Stock markets were shut for a calendar week after terror attacks on NY and Washington, D.C. left close to 3,000 people dead.

"If this is just the implosion of shorting volatility, it's not the end of the bull market", said Michael Antonelli, managing director of institutional sales trading at Robert W. Baird in Milwaukee.

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Asia's biggest market - Japan's Nikkei 225 Index - lost 4.7 per cent, while Hong Kong's Hang Seng plunged over five per cent.

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

Benchmark 10-year notes last rose 7/32 in price to yield 2.7696 percent, from 2.794 percent late on Monday.

The constant rise in US share values since 2009 has been fuelled by the extraordinary easy-money policies of the world's major central banks, and most recently by President Donald Trump's tax cuts, promises of corporate deregulation and infrastructure spending.

The market is coming off its worst week in two years. They stood at 2.75 percent on Tuesday. Brent crude, the benchmark for global oil prices, lost 76 cents, or 1.1 per cent, to US$66.86 a barrel in London.

"Shares were down sharply at the start of London trading but after a 3 percent drop the FTSE 100 recovered a bit of the lost ground". Kljunich said numerous factors could contribute to fear in the marketplace, including rising interest rates.

On Monday, the Dow finished down 4.6 percent while the S&P 500 sank 4.1 percent, to 2,648.94.

The Nasdaq Composite dropped 1.4% out of the starting gate, then climbed into narrow gains as Apple (AAPL) surged 1.5% and all of the FANG stock tech leaders reversed early losses into gains. Industrial companies were also falling. Wholesale gasoline lost 3 cents to $1.85 a gallon.

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