por admin » Vie Feb 09, 2018 2:28 pm
Dow turns positive, adds 200 points in volatile trade
Thomas Franck | Alexandra Gibbs
Published 9 Hours Ago Updated Moments Ago
CNBC.com
The Dow Jones industrial average struggled for gains in volatile trading.
The 10-year Treasury slipped to 2.8 percent Friday. The note yield flirted with 2.885 percent Thursday, a 4-year high.
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The Dow Jones industrial average climbed more than 100 points Friday afternoon, reversing the morning's deep losses with a 600-point swing.
The Dow rallied from its lows Friday afternoon, up 140 points as of 2:24 p.m. ET; the index has swung nearly 850 points in volatile trading. The S&P 500 and the Nasdaq composite both reversed course, rising 0.8 percent.
Click here for the latest index numbers in this volatile session. At its lows, the Dow had fallen more than 500 points or 2.1 percent.
"We're seeing a lot of buying support early, but I think the key thing will be the final hour of the day," said JJ Kinahan, chief market strategist at TD Ameritrade. "It's been such a volatile week that people's risk tolerance is lower."
The Dow dropped 1,032 points Thursday, its second drop of that magnitude this week.
The recent turmoil in equities began last Friday, when the Dow fell 666 points after a better-than-expected jobs report ignited inflation fears. That fall was exacerbated Monday after the yield on the benchmark 10-year Treasury note hit a 4-year high, sending the Dow tumbling another 1,175 points as investors grew more nervous about an overheating economy.
Trouble with securities called exchange-traded notes that decline in value when volatility increases likely helped create more turmoil in the markets this week. The Cboe Volatility index (VIX) — the market's best fear gauge — was higher around the 40 level after jumping as high as 50 earlier in the week.
At the end of January, the VIX was below 14. The S&P 500, meanwhile, broke below its 200-day moving average, a key technical level according to traders.
Yields then backed off their multi-year highs, giving the Dow a 560-point bounce on Tuesday and relative stability on Wednesday. But between another round of strong economic news, hawkish comments from the Bank of England and an expensive government funding bill, yields rallied again, sparking Thursday's sell-off.
"What's happened here is an understanding that inflation is returning and that the central bank quantitative easing that we've grown accustomed to is coming to an end," said Jim Bianco, head of the Chicago-based advisory firm Bianco Research. "Since the financial crisis, this is the first 10 percent correction in stocks that has not been accompanied by a significant fall in rates."
The 10-year Treasury slipped to 2.8 percent Friday. The note yield flirted with 2.885 percent Thursday, a 4-year high that sparked major equity sell-offs earlier in the week.
E-commerce giant Amazon wasn't helping things either. The company is gearing up to launch a delivery service for businesses, pitting Jeff Bezos's logistical prowess against carriers like FedEx and UPS, the Wall Street Journal reported early in the day.
Shares of UPS and FedEx were both down more than 2 percent Friday; Amazon also fell Friday, down 4.3 percent.
Other stocks that have struggled this week include 3M, American Express and Exxon Mobil, down more than 10 percent as oil prices continue to slide.
In commodities, oil prices fell for a sixth day on Friday, on track for their biggest weekly losses in 10 months. U.S. West Texas Intermediate (WTI) crude was down $1.74, or 2.85 percent, at $59.41 a barrel.
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Overseas market fared little better. In Japan, the Nikkei 225 index fell 2.3 percent, now down 11.4 percent from its 52-week high. In Germany, the Dax index slipped 1.4 percent, now down more than 11 percent from its own 52-week high.
While the week has certainly spooked many traders, several Wall Street strategists believe the recent volatility shouldn't affect the rest of 2018.
"When the nervousness hit, a lot of people who were thinking of quitting hit the exits," said Bruce McCain, chief investment strategist at Key Private Bank. "A lot of people want to let it settle out a bit and really make sure the worst has past ... [but] for our standpoint on where we'll be over the next year: We see no signs of recession."
Progress on a government spending bill also made headlines on the week's final day of trading. President Donald Trump signed a massive spending deal into law after both houses of Congress approved the bill early Friday morning.