Stock markets soared out of the gate on Tuesday after China slashed interest rates, but the gains were short-lived as the two biggest American stock indices were in the red by the end of the day.
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As of 7 a.m. Hawaii Standard Time on Monday, most local publicly traded companies were still down compared to Friday’s close, but were faring better than they were earlier in the day.
Rebecca Jarvis, ABC News Senior Business Correspondent, “This is scary, this stock sell off did come basically from out of the blue for most people”.
Analysts say that while Tuesday’s actions by the central bank may calm the stock market turmoil for now, the country faces a long period of uncertainty that will create more volatility.
Treasurys surged as investors sought the relative safety of government bonds, while the U.S. dollar weakened and oil prices continued to drop.
But he stressed once again that the latest fallout was not a reason to panic or suddenly jump out of stocks.
It’s doubtful the correction reflects the U.S. economy because economic indicators, such as employment and productivity rates, are stable, he said.
Apple shares, among the most widely held on Wall Street, slumped nearly 13 percent at the open but in afternoon trading were vacillating either side of flat on the day.
The downside is that your August statement is not going to look pretty if you have your 401(k) in mutual funds.
“It depends on your time frame”. And the Nasdaq dropped 108 points, or 2.3 percent, to 4,599 points.
As dramatic as the rebound has been, however, few would dare say the market has set a bottom.
“Is this just a correction in an ongoing bull market, or is it the start of a bear market that will be accompanied by a recession?”
China relieved investors by stepping in overnight to cut interest rates and prop up the world’s second-largest economy.
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Typically, the all-clear signal doesn’t occur until the market suffers a relapse, and drops back near old lows – in this case Monday morning’s panic lows – but stays above the old trough, Valeri adds. If you’re not retiring in another 20 years or 25 years, you have more room to weather the storm.
