Wall St plummets; S&P 500, Dow confirm correction

The S&P 500 jumped 38 points to close at 2,641, and the Nasdaq vaulted 97 points to 6,874, up 1.44 percent from the previous day. The bipartisan agreement boosts federal spending limits by $300 billion over the next two years.

US stocks posted their biggest weekly percentage drop in two years, despite ending Friday with gains.

On the other hand, the tax cuts boost growth and a lower dollar makes USA companies more competitive in worldwide markets, at least in the short term, as competitive devaluations have seldom done any good to an economy long-term. On Monday, the Dow recorded its largest ever single-day plunge, dropping more than 1,100 points by the time markets closed, but it recovered more than 560 of those points Tuesday.

It's the second time this week it has fallen over 1,000 points. "There's a fair amount of volatility in the market, and our belief is the volatility is leaving investors riddled with stress and uncertainty, which is likely to continue". The S&P 500 came down the same percentage, plummeting to close at 2,581 on Thursday.

Fears about inflation and soaring bond yields drove the Dow down about 1,300 points on the week.

Technology companies accounted for most of the broad gains, outweighing losses in energy stocks, which slumped as USA crude prices declined.

Bond prices rose. The yield on the 10-year Treasury fell to 2.83 percent from 2.84 percent.

Even so, Wall Street analysts note that the outlook for corporate America and the broader global economy remains positive. Goldcorp dropped 2.3 per cent and Kinross Gold was off 2 per cent. Chipmaker Nvidia (NVDA) added $14.56, or 6.7 percent, to $232.08.

Roomba maker iRobot plunged 24 percent after its earnings fell far short of what investors were expecting.

Perhaps investors thought the Fed would not tighten as much in 2018 and 2019 and are shifting their stance. It's still up 15 percent over the past year.

By the closing bell., the Dow had shed 0.1 per cent (19 points). The British FTSE 100 index fell 1.8 percent.

Market crashes are generally defined by an abrupt and rapid decline of 20 per cent or more.

US stocks started to tumble last week after the Labor Department said workers' wages grew at a fast rate in January.

Wall Street tumbled back into sell-off mode, with the Dow plunging more than 1,000 points as worries over interest rate hikes continued to drag the market down.

Few big companies emerged unscathed, with Dow giants Boeing and Caterpillar losing around five percent, around the same range as tech titans Amazon and Facebook. Those include worries about a potential rise in USA inflation or interest rates and budget disputes in Washington.

Not only are corrections common during bull markets, they're seen as entirely normal and even healthy.

This is approximately how much the stock market has lost since Washington passed personal and corporate income tax cuts on December 20. The Dow dropped from a January 26 peak of 26,567, closing at 23,860 - a plunge of 10.8 percent.

Other Asian share indexes also were lower, with Hong Kong's Hang Seng down 4.3 percent and Japan's Nikkei 225 3.2 percent lower. The housing industry is solid, and manufacturing is rebounding. And major economies around the world are growing in tandem for the first time since the Great Recession. But stock prices have climbed faster than profits in recent years.

"It's certainly another reason for the Bank of Canada to bide its time and probably wait until July before raising interest rates again", said Sal Guatieri, senior economist at BMO Capital Markets.

This follows the Reserve Bank of New Zealand's decision to leave interest rates unchanged this morning, as widely expected.

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