Dow loses 249 points after another wild day on Wall Street
Another sharp selloff in Asian stocks, followed by a further plunge in oil prices, sent U.S. stock prices reeling Wednesday.
A decline of 10 percent is considered a correction; a 20 percent drop is a bear market.
The Nasdaq composite index fared best Wednesday, turning briefly positive in late trading before closing with a 0.12 percent loss for the day.
U.S. investors awoke to another sharp selloff in Asian stocks.
[...] it was oil’s “inability to find a market bottom” that drove Wednesday’s downturn, said Doug Ramsey, chief investment officer of the Leuthold Group.
[...] once it gets to a certain point, below $40 (per barrel), then concerns about bankruptcy, people losing jobs in the energy industry, global contagion, they have outweighed whatever benefit you get from low oil prices.
To finance their expansion, energy companies had been big issuers of debt.
[...] when oil prices began sliding in mid-2014, investors began dumping energy bonds, pushing their prices down and their yields up.
Since mid-2014, the difference in yield between junk and investment-grade bonds has risen from about 3.5 percentage points to nearly 8 percentage points, Nielander said.
On Dec. 9, the Third Avenue Focused Credit fund, which invested in high-yield bonds, barred its exits rather than sell assets in a declining market to pay off shareholders demanding their money back.
Before the Fed move, investors’ mantra was “nothing could go wrong, buy the dips,” said Axel Merk, president of Merk Investments.
Roberts cited a litany of risks, including China, oil, a world awash in debt, currency wars, global disinflation turning into global deflation and “automation on its way to destroy 30-50 percent of all jobs in the developed world.”
If we have a full-blown cyclical bear market, with the market down 25 percent, I think we will have a recession that will be caused in part by the stock market decline.
A decline of 10 percent is considered a correction; a 20 percent drop is a bear market.
The Nasdaq composite index fared best Wednesday, turning briefly positive in late trading before closing with a 0.12 percent loss for the day.
U.S. investors awoke to another sharp selloff in Asian stocks.
[...] it was oil’s “inability to find a market bottom” that drove Wednesday’s downturn, said Doug Ramsey, chief investment officer of the Leuthold Group.
[...] once it gets to a certain point, below $40 (per barrel), then concerns about bankruptcy, people losing jobs in the energy industry, global contagion, they have outweighed whatever benefit you get from low oil prices.
To finance their expansion, energy companies had been big issuers of debt.
[...] when oil prices began sliding in mid-2014, investors began dumping energy bonds, pushing their prices down and their yields up.
Since mid-2014, the difference in yield between junk and investment-grade bonds has risen from about 3.5 percentage points to nearly 8 percentage points, Nielander said.
On Dec. 9, the Third Avenue Focused Credit fund, which invested in high-yield bonds, barred its exits rather than sell assets in a declining market to pay off shareholders demanding their money back.
Before the Fed move, investors’ mantra was “nothing could go wrong, buy the dips,” said Axel Merk, president of Merk Investments.
Roberts cited a litany of risks, including China, oil, a world awash in debt, currency wars, global disinflation turning into global deflation and “automation on its way to destroy 30-50 percent of all jobs in the developed world.”
If we have a full-blown cyclical bear market, with the market down 25 percent, I think we will have a recession that will be caused in part by the stock market decline.