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Dow Jones industrials plunge 1000 points, bringing the index down 10 percent

Dow Jones industrials plunge 1000 points, bringing the index down 10 percent

The Dow Jones industrial average plunged more than 1,000 points as a weeklong market swoon continued.

USA stock markets fell sharply Thursday, with the Dow Jones industrial average tumbling 1,033 points, or 4 percent, to 23,860.

The Dow Jones Industrial Average closed down 1,032 points (or 4.15%), meaning it is 10% down from the record high it reached two weeks ago.

The S&P 500 last confirmed a correction in January 2016, when it fell 13.3 percent amid concerns about a slump in oil prices.

While those concerns have been the catalyst for recent selling, the retreat in equities had been long awaited by investors as the market climbed nearly steadily to record highs earlier this year. The Nasdaq was down 125 points, or 1.8 percent, to 6,651. Other markets lost ground, with the Hong Kong Hang Seng index down 3.1 per cent and Japan's Nikkei 225 index recording a loss of 2.3 per cent.

Even the most bullish of market strategists will say a correction is ultimately healthy for a market because it removes some of the froth and speculation. Asian markets fell more sharply. Brent crude, the global standard for oil prices, gave up 70 cents, or 1.1 percent, to $64.81 per barrel in London. It's still up 15 percent over the past year.

The bottom of this recent slide remained elusive for investors, who have been whipsawed this week by huge swings that have shaken a market that had only climbed steadily for months. The yield on the 10-year note was as low as 2.04 per cent as recently as September.

Analysts at Barclays, Bank of America and JP Morgan estimate that volatility-targeting traders will sell roughly $200 billion of equities this week, leading to more pressures on markets.

But, while pricier valuations are one factor behind the sell-off, a bigger driver is the move by the US Federal Reserve to tighten monetary policy by raising interest rates in the face of rising wages and fears of an uplift in inflation.

Stock trading turned volatile over the last several days, breaking an unusually long period of calm. Many market watchers have been predicting a pullback, saying stock prices have become too expensive relative to company earnings.

Many investors justified that by pointing out that interest rates were low and few alternatives looked like better investments.

Rising rates are viewed as a headwind for stocks. Why? The yield on the 10-year Treasury note rose to 2.83 percent from 2.84 percent.

In currency markets, the dollar edged up to 108.87 yen from Thursday's 108.84 yen. GrubHub jumped $17.85, or 25.5 per cent, to $87.76 while Yum Brands dipped $1.94, or 2.4 per cent, to $78.19.

After a sharp loss Wednesday, benchmark USA crude lost 76 cents, or 1.2 percent, to $61.03 a barrel in NY.

In Europe, Germany's DAX fell 1.2 percent, while France's CAC 40 lost 1.4 percent.

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