Dow roars back for 567-point gain after scary start

Author: , Post Date: February 6, 2018

Excerpt below:

The powerful comeback may reflect a realization by investors that the economy is still strong, even if stocks flew too close to the sun earlier this year.

“Sometimes the market does get disconnected from economic reality to the upside and it needs to get in line,” said Jack Ablin, chief investment officer at Harris Bank.

However, he said, “the fundamentals of the economy and credit markets remain sound.”

The stock market freakout of 2018 hit a crescendo on Monday when the Dow plunged a record 1,175 points. The 4.6% plunge was the index’s worst day since August 2011 and knocked it into the red for the year.

With Tuesday’s bounce, the Dow recovered about half the losses from the day before. It’s about 6% off its all-time high.

David Kotok, co-founder of Cumberland Advisors, called it a “wild rollercoaster ride.” He said that when Dow futures plunged 1,000 points overnight, it amounted to “climactic panic selling” that could signal a bottom for the market.

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