DETROIT (WWJ/AP) – A worldwide plunge in stock prices has now engulfed Wall Street, where the Dow industrials fell more than 1,000 points in early trading Monday.
The S&P 500 fell into correction territory — meaning a drop of 10 percent or more from a recent peak.READ MORE: Ribs RnB Music Festival Kicks Off This Weekend In Downtown Detroit
Treasuries surged as investors bought less risky assets.
It could be an uphill struggle for the stock market–could we be in the midst of a market ‘correction’?
David Sowerby is the vice-president of Loomis Sales & Company in Bloomfield Hills.
“If the Dow is off more than 10 percent – US small company stocks off more than 10 percent – and technically, the S&P 500 if today’s futures hold up the S&P 500 will be in a 10 percent correction for the first time in about four years,” said Sowerby.READ MORE: Judge Says Michigan Gov. Whitmer Won't Have To Testify In Abortion Lawsuit
Growing concerns about a slowdown in China had already shaken markets around the world on Friday, sending the U.S. stock market sharply lower. And a big selloff in Chinese stocks today caused the rout to continue. China’s main index sank 8.5 percent today, amid fears over the health of the world’s second-largest economy.
“For all the challenges we are seeing in China and lingering weakness in Europe – what it’s looking like here in the United States is still an economy that is growing at a below-average but still respectable 2 – 2.5 percent,” he said.
Sowerby puts the odds of this turning into a more debilitating 20-percent down Bear market at one in three.
After the thousand-point drop at the open, the Dow trimmed those losses. Less than an hour after the open, the decline had been reduced to about 300 points.
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