After almost 10 years, Wall Street’s rally looks like it is ending.
Another day of big losses on Friday left the US market with its worst week in more than seven years. All of the major indices have lost 16 to 26 percent from their highs this summer and fall.
Barring huge gains during the upcoming holiday period, this would be the worst December for stocks since 1931.
There has not been one major shock that has sent stocks plunging. The US economy has been growing since 2009 and most experts have said they think that it will keep expanding for now.
However, it is likely to do so at a slower pace.
As they look ahead, investors are finding more and more reasons to worry. The US has been locked in a trade dispute with China for nine months. Economies in Europe and China are slowing. Rising interest rates in the US could slow its economy even more.
Dysfunction in Washington is not helping the situation, with another member of US President Donald Trump’s Cabinet announcing his resignation this week and the government on Friday night on the brink of a partial shutdown.
Stocks were now headed for their single worst month since October 2008, when the market was being battered by the global financial crisis.
THE NAUGHTY LIST
December is generally the strongest time of the year for US stocks. Traders often talk about a “Santa rally” that adds to the year’s gains as people adjust their portfolios in anticipation of the year to come.
However, not this year.
No sector of the market has been spared. Large multinational companies have joined smaller domestic ones in their losses.
Huge high-tech companies, once the best-performing stocks on the market, are now leading the way lower.
Technology’s huge popularity in the past few years of boom made it even more vulnerable as investors’ moods turned sour.
Amazon.com Inc, Facebook Inc, Apple Inc, Netflix Inc and Google’s parent company, Alphabet Inc, have seen their market values fall by hundreds of billions of US dollars.
“If you live by momentum, you die by momentum,” Center for Financial Research and Analysis chief investment strategist Sam Stovall said.
The NASDAQ composite, which contains a high concentration of tech stocks, has sunk almost 22 percent from a record high in late August.
Several big technology companies, notably Facebook and Twitter Inc, have also suffered as a result of scandals over matters such as data privacy and election meddling, and traders worry that the industry will face greater government regulation that could increase costs and affect their profits.
The major US indices this week fell 7 percent and they have sunk more than 12 percent this month.
Investors worldwide have grown increasingly pessimistic about the global economy’s prospects over the next few years.
It is widely expected to slow down, but traders are concerned the cooling might be worse than they previously believed.
After a sharp early gain on Friday, the S&P 500 retreated 50.80 points, or 2.1 percent, to 2,416.62, plummeting 7.1 percent from a close of 2,599.95 on Dec. 14. The benchmark for many index funds has fallen 17.5 percent from a high in September.
The Dow Jones Industrial Average on Friday sank 414.23 points, or 1.8 percent, to 22,445.37, diving 6.9 percent from 24,100.51 a week earlier.
The NASDAQ on Friday skidded 195.41 points, or 3 percent, to 6,332.99, an 8.4 percent plunge from 6,910.66 on Dec. 14.
The Russell 2000 index of smaller-company stocks on Friday lost 33.92 points, or 2.6 percent, 1,292.09, a steep fall of 8.4 percent from a close of 1,410.81 a week earlier.
Additional reporting by staff writer
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