Wall Street closes in correction territory as stocks tumble
US stock markets confirmed they were in correction territory today after a week of wild swings.
The Dow Jones Industrial Average and the benchmark S&P 500 were both more than 10 per cent lower than their record highs last month, closing down 4.2 per cent and 3.8 per cent, respectively. The tech-heavy Nasdaq ended the day 3.9 per cent lower.
The Vix, Wall Street's so-called fear gauge, rose more than 20 per cent to a level of 33. The index had traded lower yesterday after spiking to about 50 on Tuesday as volatile trading in the US gathered pace.
Jonathan Corpina, senior managing partner for Meridian Equity Partners in New York, warned that Wall Street was not out of the woods.
“The dust hasn’t settled yet, and I think both buyers and sellers are trying to figure out what this market really wants to do.
"I would think that this continues to happen for the next few trading sessions for everything to kind of get flushed out," he said.
Meanwhile, the UK's blue-chip index closed 1.49 per cent lower at 7,170.69.
"The current sell-off in global equities has been a long time coming. Prior to the price action over the last ten days, the major US indices had rallied almost without interruption since the Brexit vote in June 2016," said David Morrison, senior market strategist at GKFX.
"While well overdue, the sell-off in US stock indices has still left its mark.
"When markets experience this kind of turbulence it often takes time to see what the longer-term repercussions may be. The question is whether there’s been some serious damage done, either in terms of breaches of key technical trading levels or a change in overall market sentiment," Morrison said.