US stocks shot higher in afternoon trading as the market looks to recover from its biggest loss in 6 ½ years. The Dow moved in a range of more than 1,000 points, a more modest change than on Monday when the Dow fell as much as almost 1,600 points.
A hint of rising inflation and rising rates last week was all it took to set off a cascade of investor angst.
Rhetoric from the City suggests that downturn suffered by global markets in the past few days is a temporary spasm rather than the beginning of an extended bear period.
For a market that hadn't fallen 3 percent from any high in more than a year, the week's action was enough to rattle even the biggest equity bulls.
The Dow Jones Industrial Average closed down 1,032 points (or 4.15%), meaning it is 10% down from the record high it reached two weeks ago.
"We haven't seen volatility like this certainly in the past two years", said Brad McMillan, chief investment officer at brokerage company Commonwealth Financial Network. Such a rapid rise is unusual, and market analysts long warned that a pullback was overdue. Selling in the bond market led Wall Street to worry that inflation will force the Federal Reserve to speed up its rate hike plans. Because it results in higher borrowing costs, slows growth, makes bonds a more attractive investment alternative compared to stocks and makes today's corporate earnings less valuable in the future.
Emerging market stocks lost 1.78 percent. Boeing, Goldman Sachs and Home Depot took some of the worst losses. The Nasdaq composite is close, but not all the way there, down 9.7 percent from its record.
The losses were broad.
The yield on the United States 10-year Treasury bond touched a four-year high before falling back to 2.83 per cent. There are now a couple of bargains to be found in the Asia and emerging market sectors. Those stocks are often seen as substitutes for bonds because they tend not to fluctuate that much in price and provide steady income.
Stocks in Europe declined and bond yields increased after the Bank of England said could raise interest rates in coming months because of the strong global economy.
The stock markets sell-off gathered pace again overnight (9 February), with USA and Asian markets posting sharp declines.
Jobless claims was the only market moving report on the economic calendar Thursday.
The US indices ended the trading session on red territory.
Hanesbrands, which makes underwear, T-shirts and socks, reported a smaller profit than investors expected, and its forecast for the current year didn't live up to analysts' estimates either.
The potential for greater data use is a big reason CVS said in December it would buy Aetna Inc., which covers more than 22 million people as the nation's third-largest health insurer. The Dow and the Standard & Poor's 500 are now down 10 percent since then, known on Wall Street as a "correction".
Wall Street capped a week of violent swings with a big gain. The measure dropped to 16.4 as of Thursday, meaning stocks were less expensive but still not cheap.
The S&P 500 has lost 7.7 percent this week alone, its worst weekly performance since the peak of financial crisis in 2008.
Australia's S&P/ASX 200 index fell 1.5 per cent to 5,803.2 points by 0053 GMT after rising 0.2 per cent on Thursday.
Bond prices fell slightly. That also sent the pound higher. Investors need to focus on the percentage of a drop and not the number of points of a decline.