Second big drop in four days on Wall St

STOCKS ON Wall Street plunged again last night as for the second time in four days the Dow Jones industrial average sank more than 1,000 points.

The two best-known stock market indexes, the Dow and the Standard & Poor’s 500, have dropped 10 per cent from their all-time highs, set on January 26.

That means they are in what is known on Wall Street as a “correction,” their first in almost two years.

Stocks fell further and further as the day wore on and suffered their fifth loss in the last six days.

Many of the companies that led the market’s gains over the last year have struggled badly in the last week. They included technology companies, banks, and retailers and travel companies and housebuilders.

After huge gains in the first weeks of this year, stocks started to tumble last Friday after the labour department said workers’ wages grew at a fast rate in January. That is good for the US economy, but investors worried it will hurt corporate profits and that rising wages are a sign of faster inflation. It could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy.

The Dow Jones industrial average lost 1,032.89 points, or 4.1%, to 23,860.46. Boeing, Goldman Sachs and Home Depot took some of the worst losses. The S&P 500, the benchmark for many index funds, shed 100.66 points, or 3.8%, to 2,581. It has not been that low since mid-November. The Nasdaq composite fell 274.82 points, or 3.9%, to 6,777.16.

The market did not get much help from company earnings reports, several of which disappointed investors.