The U.S. economy shrank as stock market rout takes stock market plunge
Markets have been hammered by the rout in the U.K. and European markets, which have plunged over the past week, wiping out about $2 trillion in market value.
The Dow Jones industrial average fell more than 400 points, or 1.7%, to 24,906.25, the S&P 500 lost nearly 20 points, down more than 2%, to 2,527.71 and the Nasdaq Composite lost nearly 4%, to 6,054.14.
“It’s really an unprecedented event for markets to go from their best to their worst week in three years,” said Jim O’Neill, chief investment strategist at TD Ameritrade in Chicago.
There was a brief respite in the market as markets were buoyed by news that the U,S.
Supreme Court would not rule on the $5.5 trillion plan to bail out the auto industry, but the Dow Jones Industrial Average dropped more than 4%.
The S&p 500 index, which has gained nearly 17% this year, also fell.
Bond market investors are trying to hold on to their money, and many are betting on a recovery in U.C.M.A. stocks that have lost about a quarter of their value this year.
But they have fallen short of the rally that investors are expecting to see after the U’s Supreme Court ruled Tuesday that it will not hear the appeal of the auto bailout.
The Dow Jones Industrials, for example, have lost more than 7% this month.
Investors were bracing for a surge in stock market returns when the Dow finished near record highs earlier this month and the S.&.
P. stock index finished near its highest level since mid-2009.
A weaker U.N. vote on a $10 billion package to finance the world’s largest economy was also expected to boost stocks.
But many investors were holding off on buying U.W.S., which has fallen about 13% since the election.
With the Dow down about 10% this week, the Dow’s rally was not enough to reverse the market rout.
Stock markets fell sharply on Wednesday in the wake of the Supreme Court decision and after the Federal Reserve said it would hike interest rates this week.
Wall Street and government bond yields are both up.
U.S.-dollar futures for March delivery fell to their lowest levels since November 2015 and fell more sharply than the yen.