Wall Street's main indexes fell more than 1 percent in early afternoon trading on Friday, deepening losses in the past week that have put all three main USA markets in correction territory, Reuters reports. As of Thursday, some $2.49 trillion in value had vanished from the index since its most recent peak on January 26, according to S&P Dow Jones Indices. Germany's DAX was unchanged.
Shanghai closed down 4.05 percent, Hong Kong's Hang Seng down 3.1 percent and Japan's Nikkei lost 2.3 percent.
The Dow fell a record 1,175 points on Monday but rallied back on Tuesday to close the session up 568 points.
Sell-offs around the world have been pinned partly on concerns over higher interest rates.
For the stock market to halt on Thursday, to allow fearful investors a chance to cool off, the S&P would have to drop to around 2,494, according to this notice from Nasdaq that is updated daily. "With financial markets vulnerable at the moment, this was not great timing for such political brinksmanship".
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On Thursday, the Bank of England seemed to offer support for the view that rates in general are on an upward path.
After huge gains in the first weeks of this year, stocks started to tumble last Friday after the Labor Department said workers' wages grew at a fast rate in January. Those include worries about a potential rise in USA inflation or interest rates and budget disputes in Washington. Bears, including short sellers that bet on the market decline, say that the market is over-stretched in the context of rising bond yields as central banks withdraw their easy money policies of recent years. Facebook and Boeing have both fallen sharply.
The Dow Jones industrial average lost 633 points, or 2.5 percent, to 24,267. The Nasdaq Composite Index tumbled 274.82 points, or 3.90 perc ent, to 6,777.16.
Corrections are seen as entirely normal occurrences, and the market, now in its second-longest bull run of all time, hasn't seen one in two years, an unusually long time.
"Even though the epicentre of the sell-off appeared to be developments in the US, it is not surprising that South African equities have been hit hard too", said Oliver Jones, an economist at Capital Economics. And the stock market nearly never slips into a bear market without a recession either already here or in sight.
American employers are hiring at a healthy pace, with unemployment at a 17-year low of 4.1 percent. The housing industry is solid. "In other words, the stock market tends to trend higher far more often than it's declining".
"A correction is a reverse movement, usually negative, of at least 10 per cent in a stock, bond, commodity or index to adjust for an overvaluation".