In what's been a historically volatile week for markets, each of the major USA averages lost more than 3.7% in trading on Thursday with the Dow's 4.15% decline - which was good for a 1,032-point loss - leading markets lower.
It also pays to have a contingency plan for when markets plunge into bear territory, or, worst still, face a full-on crash. The market's main gauge of volatility, the CBOE Volatility Index, was at 30.5 points on Friday, down 3 from Thursday and well below the two-and-a-half-year high of 50.30 on Tuesday. The rout marked a stark turnabout from just two weeks ago, when indexes set their latest record highs. The worry, he said, is that the Fed will raise interest rates too quickly.
The S&P 500.SPX rose 19.12 points, or 0.70 percent, to 2,714.26 and the Nasdaq Composite.IXIC was up 22.72 points, or 0.32 percent, at 7,138.60.
Bond prices fell slightly.
Thursday's market decline appeared once again tied to the increase in interest rates, with the 10-year Treasury yield touching 2.86% as investors continue to work out what a rising interest rate environment means for stocks after almost a decade of low, stable interest rates and low inflation. The 10-year U.S. Treasury yield crept back to a high of 2.884 percent, near Monday's four-year peak of 2.885 percent. Skechers USA climbed $2.88, or 7.5 percent, to $41.06.
"Also, if we see some stabilising in interest rates and bond yields in particular, that would seem to indicate what's going on there has settled down". Chipmaker Nvidia was up about 6.7% in premarket trading after its upbeat results and forecast.Expedia shares sank 14.5% after the online travel services company said costs would outpace revenue growth this year as it battles rivals for market share.
USA stock markets on track for a lower open on Friday, set for their worst week in over six years. That means they are in what is known on Wall Street as a "correction", their first in nearly two years.
But those losses capture only a part of the action in markets on Thursday. On one respected valuation measure (Cape) the United States market has only been more expensive on two other ominous occasions - 1929 and 1999.
Rising rates are viewed as a headwind for stocks. Why? Brent crude, the worldwide standard for oil prices, gave up 70 cents, or 1.1 percent, to $64.81 per barrel in London.
Declining issues outnumbered advancing ones on the NYSE by a 8.64-to-1 ratio; on Nasdaq, a 6.92-to-1 ratio favored decliners. Central banks respond to rising inflation by raising interest rates. Britain's FTSE 100 shed 1.1 percent. The benchmark 10-year yield fell 2 basis points to 2.86% Friday afternoon. Even after this week's losses, the S&P is up 12.5 percent over the past year.
"When we were going up faster than we should, nobody questioned that", she said.