Stock Market Just Finished Worst Week in 7 Years

Stock Market Just Finished Worst Week in 7 Years

Another day of big losses is leaving the USA stock market with its worst weekly drop in more than seven years.

Investors fear a recession is coming, and barring huge gains during the upcoming holiday period, when trading is usually quiet, this will be the worst December for stocks since the 1930s.

There hasn't been one major shock that has sent stocks plunging. What do the bond markets tell us about how investors are feeling about the economy?

But investors have some reason for optimism. Economies in Europe and China are slowing.

Among other threats: the trade dispute between the US and China, and rising USA interest rates, which act as a brake on economic growth by making it more expensive for businesses and individuals to borrow money.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 20, 2018.

No sector of the market has been spared.

"If you live by momentum, you die by momentum", said Sam Stovall, chief investment strategist for CFRA. The technology-heavy Nasdaq composite did even worse, and is now down 20 percent from its record high in August.

The Dow is down 1,859.62 points, or 7.5 percent.

Investors around the world have grown increasingly pessimistic about the global economy's prospects over the next few years.

In the cash market, the benchmark S&P 500 Index settled at 2467.42, down 39.54 or -1.58%. The S&P 500 fell 50.84 points, or 2.06 per cent, to 2,416.58, Xinhua news reported. The Dow Jones Industrial Average slumped 464 points, or 1.9 percent. The Nasdaq fell 195 points, or 3%, to 6,332.

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Major U.S. indexes are now 16 to 26 percent below the peaks they reached in the summer and early fall.

Oil prices, which slid just over 4 percent on Thursday, tumbled to their lowest since the third quarter of 2017.

Microsoft and Amazon each fell 3.4 percent.

The Dow Jones Industrial Average fell 379 points, or 1.6 percent, to 22,950.

-Wholesale gasoline was little changed at $1.32 a gallon.

UnitedHealth Group, the largest health insurer in the country, fell 1.8 percent.

The Russell 2000 gave up 118.73 points, or 8.4 per cent.

After early gains, bond prices headed lower.

Brent Crude Oil prices also dropped to $46.16 after falling 2.5 percent. The yield on the 10-year Treasury note dipped to 2.78 percent from 2.79 percent. Procter & Gamble lost 1.3 percent.

The selling in the last two days came after the Federal Reserve raised interest rates for the fourth time this year and signaled it was likely to continue raising rates next year. The dollar rose 111.36 yen from 111.11 yen.

The British pound rose to $1.2671 from $1.2621.

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