The Dow’s darkest week since 2008
The Dow is having its worst week since the financial crisis.
Fears about inflation and soaring bond yields have sent the Dow plunging 6.5% through the first four trading days of this week. That would be the steepest decline in any week since October 2008.
After losing a record 1,175 points on Monday, the Dow tumbled 1,033 points more on Thursday. It landed in a correction, a 10% decline from previous highs. The S&P 500 has shed 6.6% this week, its second-worst since 2008. All the Nasdaq’s gains for the year have been wiped out.
The market turmoil follows a prolonged period of booming stock prices with virtually no sharp declines. Such a rapid rise is unusual, and market analysts long warned that a pullback was overdue.
“The run-up on the market was amazing. We’ve all enjoyed it,” said Rich Guerrini, CEO of PNC Investments.
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Still, the ferocity of the selling has caught investors off guard.
While the market turbulence can be alarming, analysts urged investors to stay calm because the economic backdrop is strong. The unemployment rate is 4.1%, a 17-year low, and economic growth is expected to gain steam in 2018.
“The last thing anybody should do is overreact to traditional volatility,” Guerrini said.
Despite the heavy losses this week, the Dow remains up 36% since President Trump’s election.
