The 30-share Dow (down 311.50 to 13,473.57, Charts) plunged nearly 450 points earlier in the session before moving off its lows and closing down about 2.3 percent. The Dow sank 416 points on Feb. 27 on worries about slowing global growth.Tomorrow should be a big indicator if this is just a one day drop or the start of a real stock market correction.
The broader S&P 500 (down 35.43 to 1,482.66, Charts) tumbled 2.3 percent while the tech-laden Nasdaq (down 48.83 to 2,599.34, Charts) fell 1.8 percent.
The uncertainty that unnerved investors Thursday came mainly on two fronts: tougher times for the credit markets and another barrage of bad news for housing.
Tighter credit is troubling to investors for two reasons. It's likely to slow the buyout boom that's helped prop up stock prices. And it could raise the cost of borrowing for companies, hurting corporate earnings.
A correction would have a profound psychological effect on investors who often look at their whole financial picture when deciding when and what to purchase. Any correction would make people less wealthy and could contribute to a slowing economy. With economic growth at rates just above recession level, this is not a development that is needed by the economy but it is not unexpected.
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