Stocks Surge After Incurring Massive Losses

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Hong Kong's Hang Seng skidded 5.1 percent and South Korea's Kospi declined 1.5 percent. Shanghai and Shenzhen closed down 1.8 and 1.2 percent respectively.

Wall Street stocks finished with solid gains on Tuesday (Feb 6) after a rollercoaster session, winning back a good portion of the losses from the prior session's rout. Major US equities indexes have continued to bounce, and there's no sign of when market jitters will settle down. It was a bruising reminder for investors - and for President Donald Trump, who has frequently touted the stock market gains as proof of the success of his presidency - that an overbought market will eventually stumble.

The Dow and the S&P 500 are both 10 per cent below the record highs the indexes set just two weeks ago, putting them in what is known on Wall Street as a "correction".

Benchmark 10-year notes were last down slightly in price to yield 2.8054%, from 2.766% late on Monday.

The Dow dropped 1,032 points, or 4.1 percent, to 23,860.

Stocks are rolling over again. That meant Tuesday was likely to be one of the most watched days on the markets in years.

The Dow Jones industrial average rose as much as 510 points.

The pan-European FTSEurofirst 300 index lost 2.4 percent and MSCI's gauge of stocks across the globe shed 1.9 percent. The selling spread to overseas markets. The market tumbled right from the opening bell.

The Dow is still up 21 percent over the past 12 months, and the S&P 500 is up 15 percent.

Societe Generale said in a report Wednesday that it sees a clear chain of causality in the recent stock market sell-off: global risk sentiment is driven by US equities, USA equities are driven by USA bond yields and a significant degree by core eurozone yields.

He did keep an eye on the market's performance during his congressional testimony Tuesday morning.

"I don't think the volatility is over", said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

The ups and downs are part of life on the stock market, and Mahoney says you must be willing to ride with the gains and losses and recognize there is a ceiling somewhere. Some also question the possible role of computer-driven algorithmic trading in the precipitous declines or even the ramifications of the rise and fall in the value of virtual currencies, notably bitcoin. The biggest decliner was Element Fleet Management Corp (EFN.TO), a provider of services and financing for commercial vehicle fleets, which fell 29 per cent after issuing a profit warning on Monday.

By midday it was up 30 points, or 0.2 percent, at 24,395. The Nasdaq composite was little changed at 6,968.

The stock market's last correction began in the summer of 2015 and ended in February 2016. Friday's report showed wages grew at a faster pace in January, and investors anxious that that means inflation is speeding up, and that the Federal Reserve will have to raise interest rates faster than previously expected in order to keep that inflation in check.

Global markets also fell.

Monday's decline of 1,175 points on the Dow was, by far, the biggest point decline in history. The S&P 500 .SPX was up 19.78 points, or 0.73 percent, at 2,714.92, while the Nasdaq Composite .IXIC was up 17.09 points, or 0.24 percent, at 7,132.97.

The U.S. dollar weakened against the Japanese yen early Tuesday, trading at 108.61 yen, down from 109.12 on Monday. The Dow quickly recovered much of that loss.

"We certainly could be looking at a market that's going to have to get more comfortable with the potential for a higher rate of inflation and potentially higher interest rates".

The Standard & Poor's 500 index was down 8 points, or 0.3 percent, at 2,639.