US stock market suffers worst week in nearly a decade
Sorry Wall Street — you’re on Santa’s naughty list this year.
Any lingering hopes of a “Santa Claus rally” got killed Friday as the Dow Jones industrial average capped its worst week since the financial crisis amid mounting recession fears.
With investors rattled by everything from rate hikes to fears of a government shutdown, the Dow plunged 414 points on Friday.
That capped a 6.9 percent drop this week, while the tech-weighted Nasdaq fell into bear market territory — marking a 20 percent drop from its Aug. 29 high.
Both the S&P 500 and Dow are deep in correction territory, having fallen more than 10 percent from highs reached a few months ago.
“The market is broken right now, it’s in a full blown correction heading for a bear,” said Michael Antonelli, managing director at RW Baird.
With Friday’s bleak trading, the S&P 500 is off 17.5 percent from its September high, while the Dow is down 16.3 percent after hitting a record 26,828.39 on Oct. 3.
Markets showed some hope in early trades with the Dow popping 395 points following statements Federal Reserve Bank of New York President John Williams made in an interview with CNBC.
Williams hinted that the Fed would be open to easing back on the two interest rate hikes it penciled in for 2019 and its plans to gradually reduce the size of its $4 trillion balance sheet.
“What we’re going to be doing going into next year is reassessing our views on the economy, listening to not only markets but everybody that we talk to, looking at all the data and being ready to reassess and re-evaluate our views,” Williams said.
Still, some observers noted that Willams’ comments weren’t dramatically different from what Fed Chairman Jay Powell said Wednesday after announcing the fourth rate hike this year.
“The comments by Williams earlier should have been enough to guarantee some kind of green close. The fact that they didn’t shows how sickly the market is,” Antonelli said.
And Wall Street isn’t expecting to get a reprieve in the last week of the year. Trading volumes are usually light in the week between Christmas and New Year’s Eve, and there is a dearth of economic data for traders to chomp on.