Stocks plunge, then mostly recover as wild ride continues

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The Dow Jones Industrial Average rose by 36.32 points, or 0.15 per cent, to 24,382.07, the S&P 500 lost 7.25 points, or 0.26 per cent, to 2,642.59 and the Nasdaq Composite rose 0.72 points, or 0.01 per cent, to 6,966.62 at 22:25 IST on Tuesday. Investors remain fearful that signs of rising inflation and higher interest rates could bring an end to the bull market that has sent stocks to record high after record high in recent years.

Benchmark 10-year notes last fell 9/32 in price to yield 2.7999 percent, from 2.766 percent late on Tuesday.

The pan-European FTSEurofirst 300 index rose 2.31 percent and MSCI's gauge of stocks across the globe gained 1.06 percent. These were reinforced by Friday's January report that prompted worries the Federal Reserve will raise rates at a faster pace than expected this year. Japan's Nikkei 225 index fell 2.55% on Monday, the biggest drop in 14 months.

US stocks overturned early losses to trade higher as some buyers returned to a market still shaking from a record fall for the Dow Jones Industrial Average earlier this week.

"I believe this is the bottom", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.

In another stomach-churning day Tuesday, stocks plunged in the morning, then pulled off a late-afternoon rally, ending the day in positive territory and recouping some of the losses from the market's two-day plunge.

Investors were eyeing the recent steep slide as an opportunity, an extreme example of the "buying the dip" that has symbolized the market's steady climb to record highs. No. In typical and predictable fashion, Wall Street keeps its blinders on.

"But that's a healthy development so markets can focus on areas that are generally stronger".

Wednesday's trading lacked the wild swings of the prior two sessions, but the Dow moved in a roughly 500-point range, more than three times the average daily swing over the past year.

U.S. stocks rose in early trading as markets around the world stabilized after a rout that began on Friday. But in an example of the bumpy ride Wall Street is on Tuesday, the index quickly gave up some gains was up 341 points at 24,687.

The Russell 2000 is down 27.54 points, or 1.8 percent. The S&P 500 ended 6.2 percent below its Jan. 26 peak. Emerging market stocks increased 0.18 percent.

Mark Schlipman, head of Schlipman Wealth Advisors in Quincy, said the past few days have been a perfect example of what he calls "emotional selling" when many people start making financial decisions based on the fear of making the wrong decision.

U.S. share values have also climbed further since President Donald Trump's election on the prospect of tax cuts, corporate deregulation and infrastructure spending, and the S&P 500 is still up 23.8 percent since his victory.

The treasury secretary, Steven Mnuchin, said he was not "overly concerned about the market volatility".

It's unclear if the global markets are really moving in "lockstep", as some observers have suggested, but uncertainty abounds. The euro was trading at $1.2384. Spot gold XAU= dropped 0.9 percent at $1,313.67 per ounce. The market had made big gains over the last year, and many experts felt stocks were overdue for a slump. That's true even in the U.S., where the Fed is gradually raising its rates from historically low levels.

In Saudi Arabia, the region's biggest economy, the Tadawul stock exchange slipped 1.5 percent while Qatar's closed a little more than 2 percent down. "During the selloff you got the natural reaction of bond yields going up but the moment you get some stability, yields zoom up again", Ahmed said.