United States stocks enter correction territory after plummeting second time in a week

Asian shares mirror Dow comeback, dollar steady | Miami Herald

United States stocks enter correction territory after plummeting second time in a week

Elsewhere in Asia on Friday, Hong Kong's Hang Seng pulled back 3.7%, while South Korea's Kospi index traded down 1.6% and Australia's S&P/ASX 200 eased 0.8%.

The dollar index rose 0.84 percent, with the euro down 0.03 percent to $1.2258.

Wednesday's lower close in stocks followed another choppy trading session, suggesting that investors are still jittery after the recent steep selloff in equities.

The yield on benchmark 10-year U.S. Treasuries US10YT=RR, which tends to be the driver of global borrowing costs, was hovering at 2.84 percent, set to end the week little changed since hitting a near a four-year high of 2.885 percent Monday.

Market pros have been predicting a pullback for some time, noting that declines of 10 percent or more are common during bull markets.

The turbulence spread to Asian markets overnight with several benchmarks down across the region, wiping out most gains made from the previous two days. The markets have heated up in the past year, and some saw yesterday's downturn as a needed correction.

It's been a rough few days for the stock market. "Longer term fundamentals are still good", she said. Meanwhile, perceived safe havens - including the Japanese yen and Swiss franc - drew demand amid the turmoil. That is painful for Japanese and other regional export manufacturers, whose competitiveness is hurt by stronger currencies that push their prices relatively higher. US futures were broadly lower on Tuesday morning, indicating that the selloff hasn't yet begun to taper. The bond market is a decent indicator of fears about inflation. Boeing, Goldman Sachs and Home Depot took some of the worst losses.

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By late morning Asian time benchmark USA crude had fallen 73 cents to $63.42 per barrel in electronic trading on the New York Mercantile Exchange. On the Nasdaq, 1,579 issues fell and 1,259 advanced. Brent crude, the worldwide standard for oil prices, gave up 77 cents, or 1.2 percent, to $64.74 per barrel in London.

The Cboe Volatility Index rose again on Thursday to as high as 34.54, which is more than twice as high as its recent, unprecedented lows, having suffered its biggest-ever one-day spike on Monday.

"No one was willing to try to catch a falling knife", A.C. Moore, chief investment strategist at Dunvegan Associates Inc.in Santa Barbara, Calif., said of the market's downward momentum.

By early afternoon the Dow Jones had tumbled by more than 600 points, while the S&P had shed 2 per cent.

Wall Street fell precipitously in the week after the attacks, with the Dow sinking 7.1 percent, or 684 points, on September 17-the first day trading resumed.

The Nasdaq composite fell 274.82 points, or 3.9 percent, to 6,777.16.

"We had come such a long distance in such a relatively short period of time that, by nearly any measure, the market was overbought", said John Bollinger, head of Bollinger Capital Management in Redondo Beach, Calif.

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