Wisconsin Chronicle

Wall Street volatility rules as stocks retreat again; Dow drops about 50

Wall Street volatility rules as stocks retreat again; Dow drops about 50

Volatility continues to rule on Wall Street as stocks bounce around in choppy trading Tuesday amid oil weakness and global stock turmoil that saw Japanese shares fall more than 5% overnight. Global investors are experiencing high anxiety as the dismal start to 2016 continues. There has been a flight from risky assets, such as stocks, as investor worries mount over a myriad of risks, including slowing global growth, a steep decline in oil prices, uncertainty over interest rate policy in the U.S. and, more recently, concern over the health of banks, mainly in Europe.AP FINANCIAL MARKETS WALL STREET F FILE USA NY

In late morning trading, the Dow Jones industrial average was down about 50 points, or 0.3%, after tumbling 145 points at the open and then recovering and rising about 30 points. The Standard & Poor’s 500 index was down 0.2% and the Nasdaq composite index dropped 0.2%. Oil prices briefly rallied early in the session but gave back  most of the gains after a report by the International Energy Agency said supply is set to outpace demand this year and that global excess supply may reach 2 million barrels per day during the first quarter. U.S. benchmark crude was down 10 cents to $29.59 a barrel after rising as much as $30.61 earlier.

Monday’s wild ride on Wall Street, when the Dow Jones industrial average cut a 401 point loss in half to finish down 178 points, spread to Asia overnight. The Nikkei 225 in Japan tumbled 5.4% and, in a sign of rising risk aversion, the yield on Japan’s 10-year government bond fell into negative territory at -0.023%. A negative yield means investors earn no interest on their investment, but instead pay the government to keep their cash safe. Stocks also finished nearly 3% lower in Australia. In Europe, which suffered sizable losses across the board yesterday, shares tumbled again in a volatile session Tuesday. The broad Stoxx Europe 600 was down 1.4%. The German DAX was off 1% and the CAC 40 in Paris was down 1.7%.

The persistent selling is adding up to sizable losses on Wall Street early in the new year. Heading into Tuesday’s trading session the Dow was down 8% in 2016, the S&P 500 was off 9.3% and the Nasdaq was 14.5% lower. And the declines from last year’s record closing highs are even bigger. The Nasdaq composite is down 17.9% from its July record, and flirting with a bear market, defined as a decline of 20% or more. Both the Dow and S&P 500 remain firmly in correction territory. The Dow is off 12.5% from its peak and the S&P is down 13%. The paper losses are adding up, too. The Wilshire 5000 Total Market Index has lost $2.6 trillion in market value so far this year after falling 10.6%.