Stocks Swing Back to Gains, Dow Jones Finish Week Up 330 - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Stocks Swing Back to Gains, Dow Jones Finish Week Up 330

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Stocks staged a late rally Friday, ending a wild week marked by dramatic point swings on a positive note.

The Dow Jones industrial average gained 330 points, or 1.4%, to 24,190. Earlier in the day it had dropped by 500. The S&P 500 gained 38 points.

Still, both the Dow and S&P 500 lost more than 5% for the week. Both indexes had their worst week since January 2016. The Dow recorded 1,000-point drops on Monday and Thursday.

The Standard & Poor's 500 index rose 1.5%, to close at 2,619. The Nasdaq rose 97 points, or 1.4%, to 6,874.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.85%.

Financial analysts regard corrections as a normal event 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 whether budget disputes in Washington might lead to another government shutdown.

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.

The S&P 500, the benchmark for many index funds, shed 100.66 points, or 3.8%, to 2,581. Even after this week's losses, the S&P is up 12.5% over the past year. The Nasdaq composite fell 274.82 points, or 3.9%, to 6,777.16.

The market, currently in its second-longest bull run of all time, had not seen a correction for two years, an unusually long time. Many market watchers have been predicting a pullback, saying stock prices have become too expensive relative to company earnings.

"We may have seen the worst, but it's too early to say for sure. However, our view remains that it's just another correction," said Shane Oliver of AMP Capital in a report.

Corrections of up to 15% "are normal," said Oliver.

"In the absence of recession, a deep bear market is unlikely," he said.

(CBS News)

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