NEW YORK — The stomach-churning market scare continues.
The Dow tumbled 546 points, or 2.1 percent, on Thursday after another roller coaster session.
The index briefly turned positive during morning trading before succumbing to heavy selling pressure. At one point the Dow was down 699 points. The Dow has shed 1,378 points over the past two days.
The mood on Wall Street was only slightly calmer than Wednesday’s 832-point nosedive.
The S&P 500 closed down 2.1 percent, notching its sixth-straight losing session. It’s the longest slump for the broad index since just before President Donald Trump’s election more than two years ago.
The Nasdaq briefly tumbled into a correction, signaling a 10 percent decline from previous highs. But the index climbed out of correction territory and closed down 1.3 percent.
“This kind of washout doesn’t get accomplished in a day. Even though yesterday felt traumatic, it tends to be a three-day process,” said Art Hogan, chief market strategist at B. Riley FBR.
The VIX volatility index touched its highest level since February.
One positive is that unlike on Wednesday, the market did not close on the lows of the day.
The rebound was helped by fresh reports that Trump and Chinese leader Xi Jinping have agreed to meet next month at the G-20 summit.
Such a meeting could ease fears that the US-China trade war will hurt corporate profits and slow the U.S. economy.
Tech stocks have come under fire because they are some of the riskiest and most expensive parts of the market.
Investors fear how these momentum names will hold up in a downturn, particularly as interest rates spike. A proxy for the tech sector had its sharpest plunge in seven years on Wednesday.
“Halloween started early this month for investors,” Ed Yardeni, president of investment advisory firm Yardeni Research, wrote to clients.
The afternoon sell-off comes even though a new report showed that consumer prices rose less than expected in September.
Stocks have turned sharply south in large part because investors are concerned about rising interest rates.
As the Federal Reserve raises rates to prevent runaway inflation, investors have been getting out of bonds, driving down their price and driving up their yields.
Suddenly, the return on bonds has become competitive with some stocks — particularly risky tech stocks.
Rising interest rates also increase borrowing costs for households and businesses, eating into corporate profits.AlertMe