U.S stocks suffered heavy losses at the last trading session, as investors retreated from risky assets (stocks) following an impressive rally in recent weeks.
The Dow Jones Industrial Average (DJIA) ended with a loss of 807.77 points, or 2.8%, at 28,292.73, after dropping more than 1,000 points at its session low.
The S&P 500 closed 125.78 points lower, down 3.5%, at 3,455.06.
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The Nasdaq Composite, dropped 598.34 points or 5%, to close at 11,458.10.
The plunge marked the biggest one-day drops for all three indexes since June. The fall came a day after the S&P 500 claimed its 22nd record close of the year, while the tech-heavy Nasdaq Composite arrived at its 43rd such all-time high, and the Dow topped the 29,000 level for the first time since February.
Thursday’s fall stopped a four-day win streak for the Nasdaq and a 10-day run of gains for the S&P 500’s tech sector.
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at AxiCorp, spoke about the present market correction at the world’s largest equity markets.
“Indeed, the losses overnight were driven by the same tech stocks that had underpinned the recent heady rises.
“So, this is leading to suggest we’re amid a “healthy correction,” but I see little health when Apple shares, which are one of the heavyweight champions of the tech sector and market leadership stalwart, can drop 8% in a session.
“While I don’t think it’s a healthy meltdown, getting rid of some of the short-term speculator froth will offer up better levels for the Wall of Money to indulge as we know the Fed is not going anywhere soon, although probably holding back the big guns for a possible rainy day in the future if the winter months prove to be explosive for the virus.”
However, the long-term structural support for tech stocks remains and support for equities have not changed either.