Dow and S&P Stay in Correction Territory

By Elliot Bullman

The Dow Jones Industrial Average and the S&P 500 remained in correction territory on Friday despite closing higher after another bumpy ride.

The Dow ended up 1.4% at 24,190 points, while the broader S&P was 1.5% higher at 2,619 points. Both have fallen 10% from the record highs hit on 26 January, indicating a "correction".

dow jones 3

Despite the positive finish, both indexes posted their worst weekly losses since January 2016.

Meanwhile, the Nasdaq Composite rose 1.4% to 6,874 points, giving the technology-focused index its worst week since February 2016.

"I don't think the market is focused on fundamentals at all - it's very volatile," said Anwiti Bahuguna at Columbia Threadneedle Investments in Boston.

In London, the FTSE 100 index ended the day down 1.1% at 7,092 points, bringing this week's declines to about 5%.

dow jones 2

Other European markets also suffered on Friday, with Germany's Dax falling 1.4% and France's Cac 40 shedding 1.25%.

On Thursday, the Dow Jones fell by more than 1,000 points for the second time last week, and Asian markets followed the downward trend, with Japan's Nikkei 225 shares index closing down 2.3%.

The big sell-offs around the world last week have been pinned partly on concerns over the prospect of higher interest rates.

Why are markets falling?

The global sell-off began last week after a solid US jobs report fuelled expectations that the Federal Reserve would need to raise interest rates faster than expected, because of the strength of the economy.

dow jones 1

That concern has prompted some investors to retreat from shares. Bond yields in the US have also risen in recent weeks, typically a signal of higher rates.

Higher interest rates push up borrowing costs for companies and individuals, which can hurt corporate profits and curb economic activity.

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