Forbes reported that the index fell in 8 of the last 10 sessions. The blue-chip average suffered its second 1,000-point drop in a week on Thursday. In 1987, the Dow plunged 508 points in one day-and sustained a loss of 22.6%, the largest one-day decline in the Dow's history.
In barely an hour of trading before the close in NY, the Dow Jones industrial average swung from being 300 points down to finish 330.44 points higher at 24,190.90.
The market didn't get much help Thursday from company earnings reports, several of which disappointed investors. Even the most ardent of capitalists understands this break-neck pace of stock market gains was hardly sustainable. The stock market is officially in a "correction". Britain's FTSE 100 fell 1.5 percent and the French CAC 40 lost 2 percent.
That should be welcome, as it means the world economy is returning to more normal conditions after an extraordinary period of ultra-cheap money - which was a boon for the stock market - but it means there are likely to be more sharp sell-offs and, potentially, less spectacular returns than those enjoyed in recent years. That's good for the economy, but investors anxious it will hurt corporate profits and that rising wages are a sign of faster inflation. It is also an indication that inflation was rising. The fear is that Treasury yields will rise to levels that make stocks less attractive and force the Federal Reserve to fight inflation by aggressively raising interest rates.
After huge gains in the first weeks of this year, stocks started to tumble last Friday after the Labor Department said workers' wages grew at a fast rate in January. This then causes the economic growth of a country to slow down. Early Friday, the 10-year Treasury was slightly higher at 2.86 percent.
Stack bases his concerns partly on the high stock market valuations, rising bond yields and a falling dollar. The unemployment rate is at 4.1 percent, a 17-year low, and is expected to further decline to 3.9 percent for the next two years.
If interest rates begin to rise, even by a relatively small amount, that will impact heavily on the real economy, hitting a swathe of companies, labelled "zombie firms", both in the USA and Europe that are struggling already to cover their interest payments.
At the same time, the European Central Bank is on the verge of ending its crisis-era stimulus, while the Bank of England warned Thursday that its main interest rates could rise faster-than-expected in 2018.
The impact of the United States stock markets nosediving were felt all the way to Asia.
In the course of five days an estimated $5.2 trillion was wiped off the value of global equity markets. Hong Kong's Hang Seng Index dropped by more than 3%, as did Japan's Nikkei.
Almost 80 per cent of United States companies that have reported so far this earnings season have surprised analysts to the upside. Social-media company Twitter posted its first profit, and United States firms Yum Brands, Cardinal Health and Tyson Foods also exceeded earnings expectations.
Online delivery company GrubHub soared after it announced a partnership with Yum Brands, the parent of Taco Bell and KFC. Cardinal Health and Tyson Foods also beat market expectations.
For people investing for their retirement, via ISAs and pensions, the stock market should be a long-term game.
That was particularly the case given the unusual lack of volatility seen in markets during 2017. Many market watchers had been predicting a pullback, saying stock prices had become too expensive relative to company earnings. "This is just some healthy, and overdue, volatility to wring out any excess".