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Wall Street volatility rules as stocks retreat again; Dow drops about 50

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Wall Street volatility rules as stocks retreat again; Dow drops about 50

February 09
22:18 2016

Volatility continues to rule on Wall Street as stocks bounce around in choppy trading Tuesday amid oil weakness and global stock turmoil that saw Japanese shares fall more than 5% overnight. Global investors are experiencing high anxiety as the dismal start to 2016 continues. There has been a flight from risky assets, such as stocks, as investor worries mount over a myriad of risks, including slowing global growth, a steep decline in oil prices, uncertainty over interest rate policy in the U.S. and, more recently, concern over the health of banks, mainly in Europe.AP FINANCIAL MARKETS WALL STREET F FILE USA NY

In late morning trading, the Dow Jones industrial average was down about 50 points, or 0.3%, after tumbling 145 points at the open and then recovering and rising about 30 points. The Standard & Poor’s 500 index was down 0.2% and the Nasdaq composite index dropped 0.2%. Oil prices briefly rallied early in the session but gave back¬† most of the gains after a report by the International Energy Agency said supply is set to outpace demand this year and that global excess supply may reach 2 million barrels per day during the first quarter. U.S. benchmark crude was down 10 cents to $29.59 a barrel after rising as much as $30.61 earlier.

Monday’s wild ride on Wall Street, when the Dow Jones industrial average cut a 401 point loss in half to finish down 178 points, spread to Asia overnight. The Nikkei 225 in Japan tumbled 5.4% and, in a sign of rising risk aversion, the yield on Japan’s 10-year government bond fell into negative territory at -0.023%. A negative yield means investors earn no interest on their investment, but instead pay the government to keep their cash safe. Stocks also finished nearly 3% lower in Australia. In Europe, which suffered sizable losses across the board yesterday, shares tumbled again in a volatile session Tuesday. The broad Stoxx Europe 600 was down 1.4%. The German DAX was off 1% and the CAC 40 in Paris was down 1.7%.

The persistent selling is adding up to sizable losses on Wall Street early in the new year. Heading into Tuesday’s trading session the Dow was down 8% in 2016, the S&P 500 was off 9.3% and the Nasdaq was 14.5% lower. And the declines from last year’s record closing highs are even bigger. The Nasdaq composite is down 17.9% from its July record, and flirting with a bear market, defined as a decline of 20% or more. Both the Dow and S&P 500 remain firmly in correction territory. The Dow is off 12.5% from its peak and the S&P is down 13%. The paper losses are adding up, too. The Wilshire 5000 Total Market Index has lost $2.6 trillion in market value so far this year after falling 10.6%.