Global markets plunge, then recover on volatile day
NEW YORK: The stock market recovered after an early plunge Tuesday and was little changed in morning trading, raising hopes of a halt to a global sell-off in stock markets. The swings came one day after the steepest drop in six and a half years.
Major indexes in Asia and Europe fell following Monday’s 1,175-point drop in the Dow Jones industrial average.
Investors remain fearful that signs of rising inflation and higher interest rates could bring an end to the bull market that has sent stocks to record high after record high in recent years.
Trading was choppy in the early going Tuesday, likely to be one of the most watched days on the markets in years.
The Dow Jones industrial average fell as much as 567 points shortly after the opening bell, then jumped as much as 367 points in the first half-hour of trading.
The Dow was little changed at 24,334 as of 10.49am in the US.
The Standard & Poor’s 500 index, a broader market barometer that many index funds track, was down 6 points or 0.3% to 2,641. The Nasdaq composite was down 9 points or 0.1% to 6,966.
The steep drops on Friday and Monday erased the gains the Dow and S&P 500 had made since the beginning of the year, but both remain higher over the past 12 months. The Dow is still up 20% over that time and the S&P 500 at 15% over that time.
The market mood turned decidedly fearful on Monday when the Dow Jones industrial average posted its biggest percentage decline since August 2011, driven by fears the US Federal Reserve will raise interest rates faster than expected due to a pick-up in wages.
Among the biggest losers on Tuesday was Tokyo’s Nikkei 225 stock average, which ended 4.7% lower. Hong Kong’s Hang Seng skidded 5.1% and South Korea’s Kospi declined 1.5%.
In Europe, the British FTSE 100 index fell 1.6% while the CAC 40 in France fell 1.9% and Germany’s DAX was down 1.8% . All three were lower earlier.