Monday, 5 February 2018

Dow Jones drops nearly 1,200 points in biggest daily points plunge in history

 It was a modern-day Black Monday for the stock market.
Dow Jones drops nearly 1,200 points in biggest daily points plunge in history


The Dow Jones fell nearly 1,200 points, erasing its big gains for the year and marking the index’s biggest single-day points plunge in history.

Monday’s massive selloff sank the Dow back below 25,000 points, a level it first crossed in January as the market had been surging for months.

At the closing bell, the Dow had fallen 1,175 points, or 4.6%.

While it was the largest drop ever in terms of points, the percentage loss was moderate compared with Oct. 19, 1987, when the Dow fell 22.6% after a 508-point loss; and Oct. 28, 1929, when the index was trimmed by 12.8% (the Dow closed at 261 that day).

Both historic selloffs occurred on a Monday, too.

After the latest Black Monday, the Dow is now down 8.5% from the record high of 26,617 it hit Jan.26.

The Monday drop continues a downward spiral that started with the Dow’s devilish 666-point plunge last Friday.

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The Standard & Poor 500 also continued to fall Monday, dropping 113 points, or 4.1%. The S&P has lost more than $1 trillion in market value in the past three market days alone.

The Nasdaq followed suit, falling 273 points, or about 3.8%.

The combination of overall economic growth, low interest rates, and beefed-up support from central banks has allowed stocks to reach record-breaking heights during President Trump’s first year in office.

But experts have voiced concern that the unusually calm state of the stock market has signaled an imminent decline.

“It’s like a kid at a child’s party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge,” said David Kelly, the chief global strategist for JPMorgan Asset Management.

Press secretary Sarah Huckabee Sanders tried to downplay Monday’s Dow drop.

“The President’s focus is on our long-term economic fundamentals, which remain exceptionally strong,” Sanders said in a statement.

“The President’s tax cuts and regulatory reforms will further enhance the U.S. economy and continue to increase prosperity for the American people.”


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Experts have correlated the recent market free-fall to creeping signs of higher inflation, which leads the Federal Reserve to raise interest rates more quickly, slowing down economic growth by making it more expensive for people and businesses to borrow money.

But some investors, echoing Sanders’ assessment, reasoned that the Monday drop was inevitable and not necessarily negative.

“This is a side effect of success,” Eric Schiffer, CEO of investment firm Patriarch, told the Daily News.


Schiffer said that otherwise “hot” economic trends such as rising wages, low unemployment and increased job creation “are the devil to the stock market.”

“But the underlying fundamentals are still strong,” he said. “It slows investors back a bit ... but you’re probably still going to see 5% growth this year.”

Schiffer stressed that Monday’s dive is nothing like what preceded the 2008 recession. He said that the American economy is at the strongest point this century and partially gave credit to Trump.

“Whether you like him or not, the tax cut has been positive for the economy,” Schiffer added.

Trump, who has repeatedly taken credit for stock market booms over Twitter, has stayed conspicuously mum on the recent market plunge.

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Speaking at an event in Ohio on Monday, Trump touted the GOP tax overhaul bill recently passed by Congress, but did not reference the historic Dow tumble.

Some Trump critics pointed out the apparent hypocrisy in his being quick to take credit for upswings, but staying completely silent in the wake of downturns.

“This is no longer an economy rising in the wake of steady growth in the Obama administration,” ex-Wall Street executive Amy Siskind tweeted Monday. “This is now Trump’s economy and he owns this.”

 It was a modern-day Black Monday for the stock market.

The Dow Jones fell nearly 1,200 points, erasing its big gains for the year and marking the index’s biggest single-day points plunge in history.

Monday’s massive selloff sank the Dow back below 25,000 points, a level it first crossed in January as the market had been surging for months.

At the closing bell, the Dow had fallen 1,175 points, or 4.6%.

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While it was the largest drop ever in terms of points, the percentage loss was moderate compared with Oct. 19, 1987, when the Dow fell 22.6% after a 508-point loss; and Oct. 28, 1929, when the index was trimmed by 12.8% (the Dow closed at 261 that day).

Both historic selloffs occurred on a Monday, too.

After the latest Black Monday, the Dow is now down 8.5% from the record high of 26,617 it hit Jan.26.

The Monday drop continues a downward spiral that started with the Dow’s devilish 666-point plunge last Friday.

The Standard & Poor 500 also continued to fall Monday, dropping 113 points, or 4.1%. The S&P has lost more than $1 trillion in market value in the past three market days alone.

The Nasdaq followed suit, falling 273 points, or about 3.8%.

The combination of overall economic growth, low interest rates, and beefed-up support from central banks has allowed stocks to reach record-breaking heights during President Trump’s first year in office.

But experts have voiced concern that the unusually calm state of the stock market has signaled an imminent decline.

“It’s like a kid at a child’s party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge,” said David Kelly, the chief global strategist for JPMorgan Asset Management.

Press secretary Sarah Huckabee Sanders tried to downplay Monday’s Dow drop.

“The President’s focus is on our long-term economic fundamentals, which remain exceptionally strong,” Sanders said in a statement.

“The President’s tax cuts and regulatory reforms will further enhance the U.S. economy and continue to increase prosperity for the American people.”

Experts have correlated the recent market free-fall to creeping signs of higher inflation, which leads the Federal Reserve to raise interest rates more quickly, slowing down economic growth by making it more expensive for people and businesses to borrow money.

But some investors, echoing Sanders’ assessment, reasoned that the Monday drop was inevitable and not necessarily negative.

“This is a side effect of success,” Eric Schiffer, CEO of investment firm Patriarch, told the Daily News.

Schiffer said that otherwise “hot” economic trends such as rising wages, low unemployment and increased job creation “are the devil to the stock market.”

“But the underlying fundamentals are still strong,” he said. “It slows investors back a bit ... but you’re probably still going to see 5% growth this year.”

Schiffer stressed that Monday’s dive is nothing like what preceded the 2008 recession. He said that the American economy is at the strongest point this century and partially gave credit to Trump.

“Whether you like him or not, the tax cut has been positive for the economy,” Schiffer added.

Trump, who has repeatedly taken credit for stock market booms over Twitter, has stayed conspicuously mum on the recent market plunge.

Speaking at an event in Ohio on Monday, Trump touted the GOP tax overhaul bill recently passed by Congress, but did not reference the historic Dow tumble.

Some Trump critics pointed out the apparent hypocrisy in his being quick to take credit for upswings, but staying completely silent in the wake of downturns.

“This is no longer an economy rising in the wake of steady growth in the Obama administration,” ex-Wall Street executive Amy Siskind tweeted Monday. “This is now Trump’s economy and he owns this.”
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