Dow Ends Volatile Day With a Rise of 567 Points

Anthony Matesic Gordon Charlo

Dow Ends Volatile Day With a Rise of 567 Points

"That's the real story".

Despite the extreme levels of volatility, trading patterns in the USA session remained consistent with trading patterns which have dominated the market for the past year.

"In the 'old days, ' when good news was reported, the Stock Market would go up".

Bond prices wobbled and turned higher.

Jane Sydenham, investment director at the stockbrokers Rathbones, said the recent moves were a "correction" rather than a crash.

Many are bracing for more wild swings ahead as the Cboe Volatility index is holding at twice its level from a week ago. I don't think so. He said the market was a long way from turning into a bear market, a period when the market pulls back 20 percent from its record high.

"Global markets are breathing a huge sigh of relief after a late rally in US stocks yesterday", currency analysts at ING wrote in a report on Wednesday.

The pan-European FTSEurofirst 300 index rose 2.31 percent and MSCI's gauge of stocks across the globe gained 1.06 percent.

Some investors fear the market is over-stretched in the context of higher inflation and rising bond yields as central banks withdraw their easy money policies of recent years. The S&P 500 came close to the 10 percent correction threshold but did not cross into it.

On Monday, the Dow had plunged by almost 1,200 points or 4.6%, triggering losses in Asia and Europe.

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In Tokyo, the Nikkei 225 index rose 1.1 percent. The Nasdaq composite fell 274.82 points, or 3.9 percent, to 6,777.16.

European shares also jumped and equities' trading was less choppy than in Tuesday's session.

While many neophytes may be panicking, seasoned investors and investment advisers aren't.

U.S. stocks have tumbled again, deepening the losses felt earlier this week. But shares tumbled with the market on Friday and Monday.

In fact, the big market rebound Tuesday was at least partly borne of investors' realization that there's no reason to flock to the exits when the economy is this sound.

But analysts say the market is being far too jittery. "Also, the past week provides a reminder - painful but timely - that volatility has not been repealed".

Overseas markets have mostly calmed down after plunging earlier this week.

"I'm not quivering in my boots", said David Buik, a market commentator for Panmure Gordon & Co., a London-based investment bank and institutional stockbroker.

IRobot, which makes Roomba vacuums, plummeted 32 percent after projected a smaller annual profit than Wall Street was expecting.

"Markets are capricious beasts in the short term, and, looking forward, stock prices could move in either direction without defying the laws of statistics", said Laith Khalaf, a senior analyst at Hargreaves Lansdown.

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Vice President Pence shrugged off the downturn as "simply the ebb and flow" of financial markets.

The bottom line: Experts say you shouldn't sell your stocks because the market is constantly changing.

The steep declines in Europe and Asia on Tuesday followed a heart-stopping Monday that saw the Dow at one point plunge 1,600 points.

Meanwhile, the sudden cratering of stock prices, rising bond rates and fierce volatility have been a stark reminder that Trump, like his predecessors, isn't commander in chief of the USA economy, the Associated Press explained.

David Kelly, chief global strategist at the Asset Management wing of JPMorgan claimed it was like a child at a party who after taking cake and ice cream the whole day, ate one more cookie and that put them over the edge.

"If you put $100 into the market at the January 26 peak, you'd still have $90", said Greg McBride, chief financial analyst for Bankrate.com.

The U.S. dollar rose against most major currencies amid the gains on Wall Street. Trump wrote on Twitter.

"The primary culprit was higher-than-expected wage growth in the January jobs report, which may have increased fears that the Federal Reserve would be more aggressive with interest rate hikes in 2018", according to LPL.

"Although there are a couple of things in the way of ideal scenarios, that being interest rates and bond yields and what not, people are still looking at equities as a good investment and they still believe that there is going to be continued upside", said Peter Costa, president of trading firm Empire Executions in NY.

A payroll increase led to fear of a rate hike and Monday's market "adjustment", he said, "but there's no significant concerns about the fundamentals of the US economy". The dollar index rose 0.61 percent, with the euro down 0.68 percent to $1.2292.

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"The U.S. economy is on solid foundation", said ClearBridge's Schulze. "Until the US stabilizes", he said.

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