The steep decline over two days threatens to end what has been a six-year bull run for Wall Street, The New York Times says.
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The U.S. market has lived by means of 19 corrections since World Struggle II, he stated.
Investors ditched beaten-down oil companies. This is the worst week of oil price drops since 1986.
The major European markets also moved sharply lower on the day.
Brazil’s currency, the real, has fallen 9% against the dollar in just the past 4 weeks.
Many professional investors are watching for signs the Fed might delay raising rates. But what happened was that in January, the markets went up 10 percent in one month.
“The fact is the global economy isn’t strong, and some of the major consumers of oil – China and India – are seeing slow growth“, he said.
Indicators in the US economy have been mostly positive in recent months – but some investors have feared that the stock market may have jumped ahead of economic growth. He said that, even if the American market remains troubled for a while, U.S. and foreign stocks should keep rising in the longer term, because the global economy seems poised to avoid recession.
“For much of this year, the glass was considered half full, and now people the last 48 hours are thinking it’s looking more empty”, George Hashbarger, who oversees $224 million as chief executive officer and portfolio manager at Knoxville, Tenn.-based Quintium Advisors LLC, said by phone. And last week’s surprise devaluation of China’s yuan by Beijing sent shockwaves through other emerging countries that might face tougher competition from lower-priced Chinese exports.
On Friday, more bad news: A gauge of manufacturing showed that key sector on the mainland is continuing to contract. In the U.S., the selling started early and never let up.
“You kind of have a mini-correction”, said John Canally, an economist at LPL Financial.
Investors also are wrangling with renewed concerns about China’s economy, the resignation of Greece’s prime minister, and looming questions about when the Federal Reserve will raise interest rates, perhaps as soon as September.
After what was a volatile week for the global financial markets, what’s in store for investors next week?
The uncertainty from the minutes – along with China – was a one-two punch that drove the markets down further.
In addition to Apple, energy and tech companies also took massive hits.
The Fed was expected, perhaps at its September meeting, to raise the short-term rate it controls from near zero. Still, many analysts see the U.S. market downturn as an overdue correction, which might continue into next week.
Losses earlier in the week in American shares were limited as the rout in emerging-market assets deepened, with developing-nation equities sinking to the lowest level since 2009 and currencies from Malaysia to Kazakhstan tumbling. (NASDAQ:AAPL) pacing the losers with a 6.1% nosedive. The S&P energy index.SPNY dropped 2.6 percent.
For the week, the Shanghai Composite Index sank more than 11 percent, the sharpest weekly drop since the week ending July 3. Other Asian markets followed: Hong Kong’s Hang Seng fell 1.53 percent (six percent since Monday) and Japan’s Nikkei closed nearly three percent lower (5.2 percent loss for the week). The yield of the 10-year U.S. Treasury note fell to 2.05 percent Friday from 2.07 percent Thursday. Copper lost 2 cents to $2.30 a pound. U.S. oil bounced back a bit to close down 87 cents at $40.45, the lowest close since March 3, 2009.
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Deere fell 8 percent to $83.34 after the tractor maker’s quarterly profit declined 40 percent.
