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Dow plunges 1,000 points, bringing index down 10 percent from record high two weeks ago

By in Press Enterprise on February 8, 2018

By news service reports

Dow Jones industrials plunged 1,000 points, bringing the index down 10 percent from the record it reached two weeks ago.

Stocks in the U.S. plunged for a fourth day in five with investors looking for other places to park their money amid the prospect that higher rates will drag on the economy.

The market opened little changed on Thursday but started to fall in early trading and extended its losses throughout the morning. The losses were steady, unlike the sharp swings seen over the past few days.

Traders remain on edge after the resurgent threat of inflation and higher bond yields had helped trigger the burst of volatility and a pullback across the overheated global equity market. Bulls may have to question the wisdom of buying the dip when more selling by speculators may be imminent. This week’s Treasury auctions have underwhelmed, raising the prospect that the debt selloff could steepen. Traders are also facing the prospect of Fed rate hikes, which could cool growth.

“There’s some big-money players that have really leveraged to the low rates forever, and they have to unwind those trades,” said Doug Cote, chief market strategist at Voya Investment Management. “They could be in full panic mode right now.”

The Associated Press and Bloomberg contributed to this report.

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