Major stock indexes lose 10 percent in two weeks amid correction

"You continue to have investors rerating stocks based on higher inflation and higher interest rate expectations", said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

U.S. stocks rebounded in late-afternoon trading on Friday, but remained on track to record their worst week since 2009. The Nasdaq shed 274.82 points, or 3.90, to close at 6,777.16.

Gains in industrial and consumer discretionary stocks led advances on the S&P as well as the Dow. South Korea's Kospi had declined 1.5 percent.

By midday it was up 30 points, or 0.2 percent, at 24,395.

The losses, which began last Friday, put the benchmark Standard & Poor's 500 index nearly 8 percent below the record high it set two weeks ago.

Amid continued volatility and worries about rising interest rates, the S&P 500 and Dow Jones Industrial Average both entered correction territory on Thursday-closing down 10% from the all-time highs that each hit roughly two weeks earlier.

The market, now in its second-longest bull run of all time, had not seen a correction for two years, an unusually long time.

Several factors are contributing to the return of neck-wrenching volatility this week after years of absence in the market.

Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., February 6, 2018.

But economic experts are cautioning investors to avoid selling. Gainers included technology companies, retailers like Amazon and Home Depot, and industrial companies and banks.

FTSE 100 graph
GOOGLEFTSE 100 price The FTSE 100 in the UK took a battering today

That would be a "Black Monday"-sized drop, which happened on October 19, 1987".

All US stock market indexes were down when they closed amid a volatile trading week that some analysts say could be on pace to match the 2008 financial crisis.

On Thursday, the 10-year US Treasury note yield rose as high as 2.884 percent, nearing Monday's four-year peak of 2.885 percent, after the Bank of England said interest rates probably needed to rise sooner than previously expected.

It is the second-worst fall in history, eclipsed only by Monday's 1,175-point plunge.

Corrections are seen as entirely normal during bull markets, and even helpful in curbing excessive gains and allowing new investors to buy into the market at lower prices.

USA stocks swooned Friday and Monday as investors anxious that accelerating inflation and higher interest rates could derail the market's record-setting rally.

In currency markets, the Canadian dollar closed at an average trading value of 79.46 cents USA, down 0.25 of a U.S. cent.

In Toronto, the S&P/TSX composite index was down 264.97 points, or 1.73 per cent, to 15,065.61, in a broad-based decline.

In currency markets, the dollar edged up to 108.87 yen from Thursday's 108.84 yen. All three had dropped around 2 percent the day before.

On Monday, the Dow finished down 4.6 percent, the biggest decline in percentage terms since August 2011, when investors were fretting over Europe's debt crisis and the debt ceiling impasse in Washington that prompted a US credit rating downgrade.


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