New York Stock Exchange.
The Wall Street roller coaster continued on Tuesday as the stock market gained more than 400 points in early trading, before losing it all and ending the day with another big loss to end the day at 15,666.44. At 12:47 p.m., (Eastern time) the Dow was up 358 points,before taking another big dive and ending the day down 205 points. In the last five days, the Dow has lost 1,900 points or 11 percent.
That came on the heels of a week of losses, including losses of more than 500-points on Friday and Monday. At one point on Monday, the Dow posted a more than 1,000-point loss before rebounding slightly. The S&P 500 and Nasdaq also posted similar percentage losses over the last week, but saw similar gains on Monday.
The main catalyst for the wild swings appears to be uncertainty about China’s economic strength and how its slowing economy will impact the rest of the globe.
There is also concern over whether the Fed will proceed with an anticipated rate hike in September or wait until next year.
The Dow has lost nearly 2,500 points, or 13 percent from its all-time high of 18,312 reached in August. While that puts the market in “correction” territory, the market would need to fall another 1,200 points to be considered in a full-fledged bear market.
Should the market fall below that 14,650 mark, analysts say history indicates it could take more than a year for the markets to rebound.
Other indicators of the markets direction include the Vix (Chicago Board Options Exchange Volatility Index). A higher reading could be an indicator that investors are still looking to keep money in the market.
Oil prices continue to fall, now sitting at around $33 per barrel. While that is good for those hoping to fill their gas tanks, it can also lead to deflationary fears gripping the market, which will likely send stock prices and bond yields lower. It could also be an indicator of lackluster global economic growth.
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