Dow drops more than 300 at opening, extending Friday’s losses
The Washington Post
February 05. 2018 10:47AM
Friday's frenzied stock sell-off continued Monday as the Dow Jones industrial average flirted with a more than 300-point drop in early trading, sending the blue chip index toward a 5 percent decline from its highs.
Monday's pullback came on the heels of Friday's 666-point Dow decline, the sixth-highest point drop in Dow history but only around 2.5 percent from its lofty highs. The Standard & Poor's 500-stock index was down four of the last five sessions heading into Monday.
The technology-laden Nasdaq was down six of its last eight sessions as markets opened Monday.
Foreign indexes were down across the board as worries over inflation and rising U.S. Treasury bond yields swept through financial markets. The FTSE was down 1.22 percent and the Nikkei225 was down 2.55 percent.,
Blackstone Group chief operating officer Tony James said in an interview on CNBC's Squawk Box Monday that the market was “fully valued” and that a 20 percent correction was possible in 2018
“You could easily see a 10 to 20 percent correction sometime this year,” James said.
The market volatility arrived last week after an unusually long period when it appeared there was no stopping the upward march of stocks. The S&P 500 in January saw its 10th consecutive monthly gain, the longest in 59 years.
Ironically, Friday's markets went tumbling on good economic news as the Labor Department reported a 2.9 percent increase in hourly earnings. That's good news for workers but creates nervousness among equity investors concerned that the rise will stoke inflation.
One of the big worries is that the Federal Reserve under new chairman Jerome Powell will accelerate its interest rate hikes, slowing the economy and markets with it.
Many observers believe healthy corporate earnings justify robust stock prices. With half of the S&P 500 reporting earnings so far, more than 80 percent of companies are beating expectations.
