North American stocks inch higher after Monday's heavy losses

North American stocks inch higher after Monday's heavy losses

"The economy is still strong", Lynch said.

The steep drops Friday and Monday wiped out the gains the Dow and S&P 500 had made since the beginning of the year.

At 12:32 p.m. ET (1732 GMT), the Dow Jones Industrial Average .DJI was up 274.21 points, or 1.1 percent, at 25,186.98. By late morning it was down 5.2 percent at 21,511.04. Hong Kong's Hang Seng index lost 2.5 percent. A weaker dollar and stronger yen tend to hurt prices of export-oriented manufacturers in Japan. The index, also known by its ticker symbol VIX, closed at 29.98 on Tuesday.

On Wall Street, traders took Monday's drop in stride, noting the tremendous changes in the markets since crashes like the one in 1987 that saw the Dow lose almost 23 percent of its value in a single day.

David says though the dip was large in number of points, it was not the biggest dip in percent of the stock market in a single day. The biotech- and tech-heavy Nasdaq has been slightly more resilient-it's down about 9% since its late-January high. On Friday, it was revealed that United States wages were growing at the fastest pace in more than 8 and a half years, which has led to worries that heightening inflation will lead to the Fed Reserve raising interest rates faster than expected.

At one point it was down 1,600 points.

The Standard & Poor's 500, the benchmark for many index funds, fell 113 points, or 4.1 percent, to 2,648.

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Major markets in Europe lost about 2 percent. Yields on 10-year treasuries again hit the highest level in four years, touching 2.9 per cent at one point though falling back to 2.84 per cent later in the session.

While the more than 1,000 point tumble in the Dow Jones industrial average led the market lower, the USA dollar's weakening against the Japanese yen also hurt export manufacturers' shares.

Qualcomm reported a 1.6% drop in its stock price after Broadcom raised its bid to buy the chip maker.

Investors remain fearful that signs of rising inflation and higher interest rates could stifle the bull market that has pushed stocks to record high after record high in recent years. It was down 872, or 3.4 percent, to 24,651.

A "correction" is a Wall Street term for when an index like the Dow industrials or the Nasdaq - or an individual stock - falls 10 percent from its most-recent high. After this week's pullback, the Dow is back to where it was trading in December 2017.

It takes a much bigger decline than Monday's to trigger a circuit breaker.

Wells Fargo shares fell by 8.2% after the Fed imposed new regulatory constraints on it. On Black Monday Dow plunged by a then-record of 508 points - 22%.

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