Dow Jones nose-dives 800 points on Thursday

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Dow Jones nose-dives 800 points on Thursday

The losses, which began last Friday, put the benchmark Standard & Poor's 500 index nearly 8 percent below the record high it set two weeks ago. The S&P 500 tanked 100 points to 2,581, off 3.75 percent from the previous day.

The Dow was modestly higher at 11:30 a.m., after briefly being up almost 350 points in early trading.

The Dow Jones and S&P 500 indexes officially entered into correction territory Thursday afternoon, losing 10 percent of their respective gains since January.

What many failed to predict, however, is the S&P 500's blazing slide from a record high on January 26 to a drop of 10 percent on Thursday. "What we have now is what I call fear of getting caught", said Tom Martin, senior portfolio manager with Globalt Investments. By Thursday, the index of large companies including Boeing and Apple returned to the red for 2018. The yield on the 10-year Treasury note rose to 2.83 percent from 2.84 percent.

At the same time, the Federal Reserve has said it expects to raise rates in three quarter poin increments, a modest start to returning to historically normal rates after the long recovery from the Great Recession of 2009.

Analyst Morningstar continued to attribute the global weaknesses in sharemarkets to a United States jobs report published a week ago that raised concerns about rising inflation and bond yields in the US. Goldcorp dropped 2.3 per cent and Kinross Gold was off 2 per cent. Unemployment is at 4.1 percent. Blue chips suffered their two biggest-ever point declines on Monday and Thursday, respectively.

The technology-heavy Nasdaq index was the latest to rack up cumulative falls of more than 10 percent from its peak - the technical definition of when a market is correcting.

The S&P 500 posted no new 52-week highs and 32 new lows; the Nasdaq Composite recorded 24 new highs and 113 new lows. The Dow is still trading significantly above 20,000 point; an essentially meaningless milestone it passed through for the first time just over a year ago.

"There's going to be questions about whether that's tied in the minimum wage increases we've had in Ontario", Scott said.

While the drops in terms of points this week have been historic, measured by percentage, the "Black Monday" crash of 1987 was much worse; the Dow dropped 22.61 percent on that day.

Analysts at Barclays, Bank of America and JP Morgan estimate that volatility-targeting traders will sell roughly $200 billion of equities this week, leading to more pressures on markets. The Nasdaq composite lost 101 points, or 1.4 percent, to 6,947. Markets are also more resilient since the crisis due to monetary policy implemented by many governments to prevent similar future events. Brent crude, used to price global oils, slid $2.02, or 3.1 percent, to close at $62.79 in London.

Consumer discretionary stocks slipped 0.8 per cent, with Canada Goose down 4.5 per cent and Dollarama off 3.25 per cent. South Korea's Kospi gained 0.5 percent and the Hang Seng of Hong Kong rose 0.4 percent. "In India, recovery is underway with corporate earnings higher than market expectations, though domestic market will follow global cues in the near-term", he said.

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