The Dow dropped another 391 points on Friday, making the first two (2) weeks of 2016 the worst ever for US stocks. This drop leaving the index down an incredible 1,437 points in just the first two weeks of the year. The S&P 500 lost 2.3% and the Nasdaq plunged 2.7% to its lowest level since October 2014.
The wave of selling dashes hopes that Wall Street’s panic attack was over. The Dow had jumped 228 points on Thursday, its best day since early December. But lackluster gas prices “fueled” a wage of negative sentiment. Further, questions about the Chinese economy raised further concerns for the worldwide economy. China’s controlling central government is not accustomed to allowing the free trade markets dictated the plan for the future. China’s government intervention, to date, has had a negative effect upon the Chinese stock markets.
“The sentiment is dominated by fear as likewise the “worst ever” said economists. Ahead of a long weekend, no one wants to be exposed,” said Sam Stovall, managing director of U.S. equity strategy at S&P Capital IQ.
Friday’s market slide was fueled by another worse ever crash in crude oil prices and China’s stock market tumbling into a bear market. The U.S. stock market descended into some scary territory as well, with the S&P 500 briefly breaking below its August 24 low before rebounding above it.
“There’s a mad rush for the exits! There is one direction to this trade in the immediate term: Lower,” said Peter Kenny, an independent market strategist and founder of Kenny’s Commentary. It is likely that people will be required to file chapter 7 bankruptcy or chapter 13 bankruptcy because of the loss in stock value of their portfolios.
Even the White House weighed in on the recent market turmoil. White House spokesman Josh Earnest said on Friday officials are closely watching market movements and their potential impact on the U.S. economy. From CNN Money
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