US stocks struggle to stabilize after entering 'correction'
Stocks struggled to stabilize Friday as investors sent prices climbing, then slumping in unsteady trading a day after the market entered its first correction in two years.
The up-and-down swings followed a drop of 10 percent from the latest record highs set by major U.S. indexes just two weeks ago. At midday, the market was on pace for its worst weekly tumble since October 2008, at the height of the financial crisis. By late afternoon, stocks had pared some of their losses but remained on course to add to the weeklong sell-off.
The Dow Jones industrial average briefly sank 500 points in afternoon trading after surging more than 349 points earlier in the day. The blue chip average suffered its second 1,000-point drop in a week on Thursday.
The Standard & Poor's 500 index, the benchmark for many index funds, also wavered between gains and losses.
As of Thursday, some $2.49 trillion in value had vanished from the index since its most recent peak on Jan. 26, according to S&P Dow Jones Indices.
"When you have an early morning rally in a decline of this nature, all that does is invite selling," said Bruce Bittles, chief investment strategist at Baird. "That's what we saw yesterday, and we know where that ended up."
The S&P 500 rose 6 points, or 0.2 percent, to 2,587 as of 3:15 p.m. Eastern Time. The Dow gained 36 points, or 0.2 percent, to 23,896. The Nasdaq composite added 19 points, or 0.3 percent, to 6,796.
Losses in restaurant chains, cruise lines, department stores and other consumer-focused companies outweighed gains in technology stocks and other sectors. Energy companies also fell as U.S. crude prices slumped, sending the price of oil below $60 a barrel for the first time this year.
Bond prices were little changed. The yield on the 10-year Treasury held steady at 2.83 percent.
Some companies rose after reporting quarterly results and outlooks that beat Wall Street's forecasts. Skechers USA climbed $2.51, or 6.6 percent, to $40.69. Chipmaker Nvidia added $12.13, or 5.6 percent, to $229.65.
Expedia slumped after its latest earnings fell short of analysts' expectations. The travel website's 2018 outlook also disappointed investors. Its shares sank $22.01, or 17.9 percent, to $101.02.
The turbulence in U.S. stock indexes followed a broad slide in global markets.
In Europe, Germany's DAX fell 1.2 percent, while France's CAC 40 lost 1.4 percent. Britain's FTSE 100 shed 1.1 percent. Asian markets fell more sharply. Tokyo's Nikkei 225 lost 2.3 percent and Hong Kong's Hang Seng gave up 3.1 percent.
U.S. stocks started to tumble last week after the Labor Department said workers' wages grew at a fast rate in January.
Investors worried rising wages will hurt corporate profits and could signal an increase in inflation that could prompt the Federal Reserve to raise interest rates at a faster pace, putting a brake on the economy.
On Wall Street, many companies that rose the most over the last year have borne the brunt of the selling. Facebook and Boeing have both fallen sharply.
"Equities have traded in roller-coaster fashion all week, and today is no exception," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "There's a fair amount of volatility in the market, and our belief is the volatility is leaving investors riddled with stress and uncertainty, which is likely to continue."
Financial analysts regard corrections as normal events but say the latest unusually abrupt plunge might have been triggered by a combination of events that rattled investors. Those include worries about a potential rise in U.S. inflation or interest rates and budget disputes in Washington.