What Is a Stock Market Correction?


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What Is a Stock Market Correction?

What Is a Stock Market Correction?”

Wall Street stocks finished solidly higher on Wednesday (Feb 14), rising for a fourth straight session, after weak retail sales data offset shareholder concerns over a jump in inflation. And when the market fell by roughly 10% of its 2007 highs by February 2008, the stock market was in a correction at that point.

U.S. Treasury prices finished flat, with the benchmark 10-year yield losing a basis point to 2.88% while the two-year yield ticked up a basis point to 2.19%; for the week, the 10-year yield added 2 bps and the two-year yield jumped 12 bps. Growth for the entire calendar year was 1.6 percent, up from 0.9 percent in 2016. The CBOE Volatility index ended lower on Wednesday and fell below 18 on Thursday, well off the 50-point peak touched last week.

The sell-off was set in motion when the strongest hourly wage gains since 2009 sparked fears of a spike in inflation and caused the yield on the 10-year Treasury note to rise to a four-year high and near 3%. Stocks Pen (SP) makes sure to keep the information up to date and correct, but we didn't suggest or recommend buying or selling of any financial instrument, unless that information is subsequently confirmed on your own.

The gains suggest Wall Street is beginning to regain confidence after a major selloff earlier this month briefly sent major indices down more than 10 per cent which is considered correction territory.

The Nikkei 225 Index dropped 90.51 points or 0.4 percent to 21,154.17, the lowest closing level since October. The Nasdaq climbed 43 points, or 0.6 percent, to 7,189.

U.S. April gold futures settled up $0.9, or 0.1 percent, at $1,356.20 per ounce.

The benchmark S&P 500 index's 4.3-per-cent gain since Monday has put it on track for its best week since January 2013.

The financials group also helped support the market, gaining 0.4 per cent as Toronto-Dominion Bank (TD.TO) rose 0.7 per cent to $72.81, while Brookfield Asset Management (BAMa.TO) was up 2.2 per cent at $49.43. This week has seen its initial worries with inflation and interest rates swapped out with a new bullish trend. The rally came after the Commerce Department recommended tariffs on major metal imports, including a 24% tariff on steel imports from all countries (http://www.marketwatch.com/story/metals-and-mining-etf-rallies-after-commerce-department-recommends-tariffs-2018-02-16). The ratio between current volume and 3-month average value, also known as Relative volume was observed at 0.52, validating the stock's In Play state.

Is the US market at risk of a Burn-Out?

As a serious shareholder, you need to look at plentiful factors that can assist you determine whether any given stock is a good investment.

They stressed that the price drop was a much-needed pause for a market that had gone up a lot in a very short time.

European shares are expected to rise 0.3 to 0.4% at the opening, according to spread-betters. On the Nasdaq, 1,232 issues fell and 1,148 advanced.

World shares were set to post their best week of gains in six years after two consecutive weeks in the red.

"Investors are getting comfortable with the idea that growth is sufficient enough to withstand the expected rate increases that we're going to get as well the increases in inflation that we've seen", said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.



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