Nasdaq reenters a bear market at the end of a miserable week

Nasdaq reenters a bear market at the end of a miserable week

Nasdaq reenters a bear market at the end of a miserable week

The Dow Jones Industrial Average fell 414 points, or 1.8 percent, 22,445.

Michael Hewson, chief markets analyst at CMC Markets, said: "China is cooling and the eurozone is slowing down, and some of the economic indicators from the United States have been a bit soft recently, but yet the Fed hiked rates and suggested that two more interest rate hikes were lined up for 2019".

"We see slowing economic and earnings growth and a carousel of concerns", said Keith Lerner, chief market strategist at SunTrust, in a note to investors Friday.

The Dow just suffered its deepest weekly plunge since 2008 and the Nasdaq is officially in a bear market.

USA stocks closed lower on Friday as investors digested the latest economic data, speech from a central bank official, and the fact that the government is on the verge of a partial shutdown.

The S&P 500 index skidded 39.54 points, or 1.6 percent, to 2,467.42.

As recently as October, yields had been at a seven-year high of 3.261 percent.

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The benchmark S&P 500 index has slumped 10.6 percent this month and is nearly 16 percent below the peak it reached in late September. It's now down 17.5 per cent from its high of 2,930.75 on September 20. The technology-heavy Nasdaq composite is now down 19.5 percent from the record high it reached in August. What do the bond markets tell us about how investors are feeling about the economy?

Nike rose sharply Friday after reporting a strong quarter, but other companies fell.

The Federal Reserve's rate hike on Wednesday drove the losses this week and fears of an extended government shutdown only added to the pain on Friday. Relative to their size, they also tend to carry more debt than larger companies, which could be a problem in a slower economy with higher interest rates. Growth in China for instance has weakened and the German economy had its first quarterly decline since early 2015. The broader S&P 500 index continued its slump, too, and is down 10.6 percent this month alone, with six days of trading to go.

That works out to corrections becoming bear markets a little less than 40 per cent of the time.

The S&P 500 is down 256.99 points, or 9.6 per cent.

After steady gains through the spring and summer, stocks have nosedived in the fall as investors worry that global economic growth is cooling off and that the US could slip into a recession in the next few years.

Generally, investors look for a 20 per cent gain from a low point as well as sustained gains over at least a six-month period. For the last three years the Fed told investors weeks in advance that it was nearly certain to increase rates. When the 10-year yield falls below the two-year yield, investors call it an "inverted yield curve".

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