Dow plunges 1,033 points as economic fears linger.

Specter of higher interest rates spooks traders as themarket dives for the second time in four days

NEWYORK » Twitter proved to be one of the few bright spots on Wall Street on Thursday, as stocks plunged again, and for the second time in four days the Dow Jones industrial average sank more than 1,000 points as wild trading and fears of rising interest rates around the world took hold of traders.

Twitter soared 12 percent after turning in a profit for the first time. Its fourthquarter revenue was also better than expected. The stock rose $3.27 to $30.18.

However, the market didn’t getmuch help Thursday from company earnings reports, several of which disappointed investors. While U.S. companies mostly did well at the end of 2017, a number of them had a weak finish to the year.

The Dow as well as the S&P 500, a broader stock index, are now down more than 10 percent from their all-time highs, passing an important psychological barrier known as a “correction” for the first time in two years.

Such pullbacks are relatively common and usually occur over a two- to threemonth period. But the jarring nature of the market plunges over the past two weeks - on Thursday the Dow tumbled nearly 500 points in amere 30minutes before the closing bell -- are beginning to reshape sentiment on Wall Street. Some analysts are now predicting darker, more volatile times ahead.

The declines, if they persist, and the fear they generate can have ripple ef-

fects on the economy, which is performing solidly right now in the United States and abroad. When people see massive losses in their brokerage accounts or 401ks, they tend to lose confidence and spend less.

Investors also are growing concerned that inflation is rising, which is compelling central banks to raise interest rates. That makes it more expensive for companies and consumers to borrow, hampering actual economic activity.

“Ten percent is no small potatoes,” said Chris Rupkey, an economist with MUFG Union Bank. “It’s a big number. That loss of wealth is going to take a toll on overall spending in the economy both for businesses and individuals.”

Regardless of whether the market continues on its downward trajectory - a much more menacing “bear market” looms if stocks fall 20 percent - many analysts said the last two weeks of dramatic drops, rapid rises and followed by more heart-pounding dives have already made a distant memory of the blissful and steady multi-year rise in stocks.

One factor thatmay have contributed to Thursday’s sell- off were remarks by the Bank of England, which said it might have to raise interest rates “earlier” and by a “somewhat greater extent” than it had thought.

That reinforced to markets that the easy-money policies put in place by cen- tral banks during the global recession a decade ago are coming to an end. Instead, policymakers will be raising interest rates to keep inflation in check.

Thursday’s losses wiped out all of the gains for the year for the Dow and S&P. The Dow dropped 1,032 points, or about 4.2 percent, to close at 23,860 - the second time it has lost more than 1,000 points over the past week. The Dow is now 10.4 percent below its alltime high on Jan. 26.

The technology- laden Nasdaq and S&P also tumbled lower Thursday with each seeing losses of nearly 4 percent. Trading volumes were far above normal.

On Thursday, the yield on the benchmark U.S. 10year Treasury bond touched a four-year high before falling back to 2.83 percent. A 3 percent yield is looked upon by investors as a sign that investors are f leeing the risk of stocks for the relative safety of bonds.

“There is a lot of concern in the rising yield in the 10year Treasury note,” said David Kass, professor of finance at the University of Maryland. “As it approaches 3 percent, concerns about inflation and competition for stocks by fixed income securities are increasing.”

Some believe the 3 percent yield is inevitable. Bond yields are rising as the Federal Reserve trims its U. S. bond holdings and pulls back on its easymoney policies. The Treasury is also having to borrowmoremoney, partly because of the tax cuts.