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Dow drops 400 points as bond yields creep higher

10 February 2018

By closing at 23,860 points, the Dow Jones industrial average was set back to its level on November 17, 2017, and officially corrected.

US stocks are reversing course Tuesday morning after sharp losses in the first few minutes of trading, raising hopes of a halt to a global sell-off in the stock market.

Worries about inflation set the market rout in motion last Friday, and many market watchers have been predicting a pullback after the market's relentless march higher over the past year.

"But the decline didn't feel as panicked today as it did on Monday", Yousef Abbasi, global market strategist for JonesTrading, told ABC News.

The Dow was up 141 points, or 0.6 percent, at 24,483.

The Standard & Poor's 500 index slipped 39 points, or 1.5 percent, to 2,541. And the NASDAQ closed 275 points lower, at 6,777.

Nine of the 11 major S&P sectors were lower, with the industrials index's 0.57 per cent fall in early trade leading the decliners.

New York's three main indexes sank as much as 2 percent on the opening bell but they quickly moved back into positive territory. Those include worries about a potential rise in US inflation or interest rates and budget disputes in Washington. The Russell 2000 index of smaller-company stocks gave up 5 points, or 0.3 percent, to 1,485.

In Europe, the British FTSE 100 index fell 1.6 percent while the CAC 40 in France fell 1.9 percent and Germany's DAX was down 1.8 percent. The Nasdaq composite was down 6 points, or 0.1 percent, to 6,956.

Tuesday's rebound came a day after a steep selloff that brought the biggest percentage daily declines for the S&P 500 and the Dow since August 2011 and a near 1,600 point intraday loss for the Dow.

Thursday marked another day of recent sharp swings including the S&P 500's biggest drop in more than six years on Monday that pulled equities away from record highs.

"The markets went into being religiously over-bought to deeply over-sold in a matter of four trading days", said Adam Sarhan, chief executive of 50 Park Investments, an investment advisory service. Brent crude, the global standard for oil prices, gave up 70 cents, or 1.1 percent, to $64.81 per barrel in London.

Bond prices fell. The yield on the 10-year Treasury rose to 2.85 percent from 2.83 percent late Thursday.

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

That sign of inflation has market participants anxious that the Federal Reserve will increase interest rates, perhaps more aggressively than the three rate hikes already expected for this year. South Korea's Kospi had declined 1.5 percent. "We're monitoring the stock markets, they are functioning very well and we continue to believe in the long-term impact of the stock markets", Mnuchin said.

United Kingdom blue chips were trading down around 0.26% by 11.13am (GMT), at around 7,153 points while on the continent the Euro Stoxx 50 was down 0.57% to 3,358 points.

Japan's benchmark Nikkei 225 surged as soon as trading began, adding 2.9 percent to 22,230.73 within the first hour of trading. If RVOL is less than 1 it is not In Play on this trading day and Investors may decide not to trade it.

Dow drops 400 points as bond yields creep higher