The Wall Street entered correction territory on Monday, with the Dow sliding below 16,000 for the first time since February 2014 following a more-than 8 percent drop in Chinese stocks and a selloff in oil and other commodities.
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All the three major Wall Street indexes were up more than 2 percent, with tech stocks and banks leading the way. But a wave of buying by bargain-hunters cut the Dow’s losses by half just five minutes later.
“We are unlikely to be going into a bear market“, said Jason Ware, chief investment officer at Albion Financial Group, which manages about $1 billion for clients from Salt Lake City, Utah.
Stocks regained some of that ground as the day wore on, but the Dow finished with a loss of 588 points, the eighth-worst single-day point decline and the second straight fall of more than 500.
Monday’s roller-coaster makes it more hard for the Federal Reserve to do something it hasn’t wanted to accomplish for years: raising interest rates. The stock had slumped as much as 13 percent on Monday, before ending down 2.5 percent.
Disney was up 3.7 per cent at US$98.90, while Alibaba was up 5.6 per cent at US$69.48. CEO Tim Cook wrote in an email to CNBC that China business experienced “strong growth” in July and August, seeking to assuage investor concerns over the company’s prospects in a market considered critical for its growth.
The slump – part of a global wave of selling touched off by signs of a slowdown in China, the world’s second-largest economy – triggered worries among Wall Street professionals and ordinary Americans who are saving for retirement or a down payment on a house.
But he stressed once again that the latest fallout was not a reason to panic or suddenly jump out of stocks.
As dramatic as the rebound was, however, few would dare say the market has set a bottom.
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“That said it’s the uncertainty that drives everyone insane; because no one really knows”.
