U.S. stock market plunges, enters 1st correction in 2 years

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- Stocks plunged again Thursday, and for the second time in four days the Dow Jones industrial average sank more than 1,000 points.

The Dow Jones industrial average had been down 500 points before swinging to a 330-point gain. The Nasdaq composite fell 274.82 points, or 3.9 percent, to 6,777.16.

The Nasdaq composite tumbled 63.90 points, or 0.9 percent, to 7,051.98.

The Standard & Poor's 500, the benchmark for many index funds, is also 10 percent below the record high it set two weeks ago.

US equities extended their losses in a week overtaken by wild swings in the stock market.

Walt Disney Co.'s stock reversed early gains to drop 1.3% after the entertainment giant reported stronger-than-anticipated earnings late Tuesday.

Many Wall Street pros are blaming the stock market's recent sell-off on the bond market.

Recent signs of rising inflation have led to worries that the Federal Reserve may raise rates faster than previously anticipated.

Even with Friday's gains, all three major US indexes were down more than 5 percent for the week, and investors said the sharp swings that marked the week's trading were likely to continue.

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For example, a stock may near its 52 week low in a price correction after earnings expectations for future quarters were revised. The stock is now showing down return of -4.50% throughout last week and witnessed bullish return of 11.49% in one month period.

US stocks started to tumble last week after the Labor Department said workers' wages grew at a fast rate in January.

Joe Brusuelas, chief economist at the investment firm RSM in NY, said investors see the Fed's plan as the "end of the era of easy money". European markets were also lower after the Bank of England said it could raise interest rates in the coming months.

USA 10-year government bond yields lifted to 2.88 per cent, its highest level in four years - before falling back to 2.83 per cent.

Ninety-six S&P 500 stocks are down 20 percent or more from their own one-year highs, according to Thomson Reuters data. The S&P 500 closed at 2,681.66 for a loss of -13.48 points or -0.50%.

At one point, the market was on pace for its worst weekly decline since October 2008, at the height of the financial crisis. Rising yields have made bonds more appealing to some investors compared to stocks. "Corrections such as this over time put the market on a more sustainable path", he said. The yield on the 10-year note was as low as 2.04 percent as recently as September. The housing industry is solid.

Benchmark U.S. crude lost $1.95, or 3.2 percent, to settle at $59.20 per barrel on the New York Mercantile Exchange.

"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".

In Europe, Germany's DAX fell 1.2 percent, while France's CAC 40 lost 1.4 percent.

Even steeper falls were recorded in Shanghai (-4.5pc), Hong Kong (-4pc), Tokyo (-3.2pc) and Seoul (-2.1pc).