https://www.nytimes.com/2018/02/08/business/stock-market-activity.html
"Major stock indexes dropped sharply late Thursday afternoon, falling into a market correction, as volatility returned after a brief respite. The Standard & Poor’s 500-stock index fell more than 3 percent and the Dow Jones industrial average dropped 3.5 percent, in a broad-based selloff as the end of trading approached.
A correction is fall of 10 percent from the market’s recent peak. A decline of 20 percent would mark the start of a bear market in stocks."
One of the causes, is the recent high-volatility in the markets & its effect on trading strategies:
http://www.businessinsider.com/stock-market-news-dow-jones-industrial-average-february-8-2018-2
"Stocks have failed to hold a strong rebound since Friday, when a better-than-expected report on wages increased worries about higher US inflation. The selling continued this week, worsened by technical factors including the implosion of trading strategies that had bet on low volatility."
Another cause, is the rise in the 10-year treasury yield:
https://www.cnbc.com/2018/02/07/us-stock-futures-dow-data-earnings-market-sell-off-and-politics-on-the-agenda.html
"Stocks closed lower on Wednesday after trading in a wide range again as interest rates climbed back toward multi-year highs.
The S&P 500 pulled back 0.5 percent to 2,681.66 after rising as much as 1.2 percent, logging its biggest one-day reversal since February 2016. TheDow Jones industrial average closed 19.42 points lower at 24,893.35, notching its biggest reversal since August 2015. The index rose as much as 381 points and fell as much as 127 points.
The indexes began losing steam in afternoon trade shortly after a rise in the 10-year Treasury yield, rekindling the worry that sparked this cascading market plunge last Friday."
As well as fear the Fed will eventually raise interest rates to "try to cool the economy":https://www.nytimes.com/2018/02/07/upshot/the-stock-market-is-worried-about-inflation-should-it-be.html
"But if the overheating/Phillips Curve
narrative is coming true, the Fed will have
to raise interest rates to try to cool the
economy, which would make capital more
costly for businesses and dampen consumer
spending.
That’s all bad news for stocks.
What happened Friday was that a wage number
was published that was consistent with the
overheating/Phillips Curve story of how the
economy works, which is a big reason markets
sold off."
In addition, the "emergency stimulus" from major central banks is coming to an end:
https://www.theguardian.com/business/2018/feb/08/dow-jones-sinks-again-as-bond-yields-rise-and-higher-inflation-feared
"The trigger for the latest sell-off was a jump in the yield on 10-year US Treasury bonds – seen as a key indicator of inflationary pressure and the likelihood of higher interest rates.
Ten-year bond yields climbed to almost 2.9%, with markets speculating about whether they would hit 3% over the coming days.
Rising bond yields – coupled with a strong signal from the Bank of England that an interest rate increase was on the way – added to expectations that the world’s major central banks are now firmly on course to wind down the emergency stimulus they have pumped through the financial system since 2009, driving an almost decade-long stock market rally."
Finally, the 4.15 percentage loss (still a 10% slide from its record high), wasn't as historically bad (as far as optics), as the 1,032 point loss which is "the second-worst fall in history, eclipsed only by Monday's 1,175 point plunge":
Rising bond yields – coupled with a strong signal from the Bank of England that an interest rate increase was on the way – added to expectations that the world’s major central banks are now firmly on course to wind down the emergency stimulus they have pumped through the financial system since 2009, driving an almost decade-long stock market rally."
"The Dow Jones Industrial Average closed down 1,032 points (or 4.15%), meaning it is 10% down from the record high it reached two weeks ago.
This also puts it in what is known on Wall Street as a "correction".
It is the second-worst fall in history, eclipsed only by Monday's 1,175-point plunge.
The broad-based S&P 500 dropped 100 points or 3.75%, and the tech-rich Nasdaq was down 3.9%."
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