Mainenews reporter

Stock comeback falters as losses mount again: Dow down 600+

Stock comeback falters as losses mount again: Dow down 600+

After a valiant effort to recoup its earlier loss of more than 1,000 points, losses were reaccelerating for the Dow Jones industrial average in volatile action in the last hour of trading, with the Dow down 680 points and still flirting with its biggest one-day drop in history. In volatile trading, the Dow initially plunged as much as 1,089 points in early trading before clawing its ways back to a loss of only about 100 points. But losses picked up again and the Dow was down 680 points, or 4.1%, in late afternoon trading. The Dow is in danger of suffering its worst one-day point loss on record — a 777.68 drop on Sept. 29, 2008beginners-stock-market

The Standard & Poor’s 500 index was down 75 points, or 3.8%, as it dipped into correction territory —  which is defined as a drop of 10% or more. The Nasdaq composite index was down 175 points, or 3.8%. The Dow’s midday reversal wasn’t totally shocking, given how far and how fast the blue-chip gauge fell minutes after the opening bell, says David Kotok, chief investment officer at Cumberland Advisors.

“The 1,000-point Dow down opening was an extreme,” Kotok said earlier in the session. “So a rebound was in the cards and when Europe stabilized, (the Dow) followed. “ “We went three years, two months and 21 days without a 10% correction in the (S&P 500),” says Don Luskin, market strategist at TrendMacro. “It was overdue. That doesn’t make it a bear market.”

Stocks remain volatile as market anxiety is on the rise after a big sell-off in China overnight, where the Shanghai composite index shed 8.5%, its biggest one-day decline since 2007 — and Chinese media were dubbing the selloff “Black Monday.” The global stock rout then moved to Europe where major indexes there are off roughly 5%. “It’s a really cruel summer,” Savita Subramanian, equity and quant strategist at Bank of America Merrill Lynch told clients in a report before the opening bell. “Call it derisking, a flight to quality, a momentum meltdown, or the first signs of a global recession,” but the fact is the past week saw the first pullback of greater than 5% since last October and the worst week since September 2011, she added.

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