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.

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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.

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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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