Wild swings on Wall Street at end of turbulent week
10 February 2018
The US stock market closed up yesterday, with the Dow index rising 330 points in a day of wild swings at the end of the most turbulent week since the 2008 global financial crisis.
In an indication of the market gyrations, the business channel CNBC calculated that the Dow moved a total of 22,000 points up and down during the week, within a 2,000-point range. Movements in prices that would normally take place over hours or days occurred within minutes or even seconds.
Yesterday’s trading was another expression of this volatility. The Dow opened more than 300 points up before falling to 500 points down during the afternoon and then rising again—a swing of over 800 points during the day.
At one point, the more broadly-based S&P 500 index faced an 8.3 percent loss for the week, which would have made it the worst week since November 2008, during the financial crisis. The rally at the end of the day cut its losses for the week to around 5 percent.
The sell-off and wild swings on Wall Street had significant international effects. European stocks on Friday fell for the ninth day out of the last 10 days. The Eurofirst index was down 1.9 percent for the day, taking its losses for the week to 7.2 percent—the biggest fall since the eurozone financial crisis of 2011.
In Asia, Hong Kong’s Hang Seng index closed down 9.5 percent for the week, its worst result in nearly a decade and Japan’s Topix index dropped 7 percent, its biggest weekly fall in almost two years.
In the course of five days an estimated $5.2 trillion was wiped off the value of global equity markets.
The trigger for the sell-off was the return of market volatility last Friday with the announcement of a small increase in US wages—up…