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| Dow drops by more than 1,000 points twice in week | Dow drops by more than 1,000 points twice in week |
| (35 minutes later) | |
| Wall Street shares slid sharply again on Thursday, compounding losses on the Dow Jones Industrial Average and S&P 500 which started last week. | Wall Street shares slid sharply again on Thursday, compounding losses on the Dow Jones Industrial Average and S&P 500 which started last week. |
| The Dow Jones Industrial Average fell by more than 1,000 points for the second time this week, plunging 4.15% to 23,860. | The Dow Jones Industrial Average fell by more than 1,000 points for the second time this week, plunging 4.15% to 23,860. |
| The S&P 500 dropped 100.6 points or 3.75% to 2,581, while the Nasdaq slid 274.8 points or 3.9% to 6,777.1. | |
| The moves follow a day of losses on all key European exchanges. | The moves follow a day of losses on all key European exchanges. |
| The 100 share index in London closed down 1.49% at 7,170.69 points. Germany and France fell 2.6% and 2% respectively. | The 100 share index in London closed down 1.49% at 7,170.69 points. Germany and France fell 2.6% and 2% respectively. |
| The dive extends a sell-off that started last week, as investors started to worry that inflation might rise more quickly than expected, leading policymakers to raise interest rates. | The dive extends a sell-off that started last week, as investors started to worry that inflation might rise more quickly than expected, leading policymakers to raise interest rates. |
| On Thursday, the Bank of England seemed to offer support for that view. | On Thursday, the Bank of England seemed to offer support for that view. |
| The bank left interest rates where they were at 0.5% at its meeting, but said a strengthening economy meant interest rates were likely to rise sooner than the markets were expecting. | The bank left interest rates where they were at 0.5% at its meeting, but said a strengthening economy meant interest rates were likely to rise sooner than the markets were expecting. |
| Also worrying markets was a government budget deal US lawmakers in Congress have announced, which raises spending caps and could fan inflation. | Also worrying markets was a government budget deal US lawmakers in Congress have announced, which raises spending caps and could fan inflation. |
| Bond yields in the US have also risen in recent weeks, typically a signal of higher rates. | Bond yields in the US have also risen in recent weeks, typically a signal of higher rates. |
| Higher interest rates push up borrowing costs for companies and individuals, which can hurt corporate profits and curb economic activity. | Higher interest rates push up borrowing costs for companies and individuals, which can hurt corporate profits and curb economic activity. |
| At the same time, higher interest rates can make investment alternatives to stocks, such as bonds, more attractive. | At the same time, higher interest rates can make investment alternatives to stocks, such as bonds, more attractive. |
| Shifting conditions | |
| The uptick in volatility comes as investors react to the shifting conditions. | |
| Thursday's declines mean the Dow and S&P 500 have now fallen by more than 10% from the record highs set in January, a threshold analysts call a correction. | |
| Shares in financial, technology and consumer companies led the declines on Thursday, which infected every sector. American Express and Intel were the two biggest losers on the Dow. | Shares in financial, technology and consumer companies led the declines on Thursday, which infected every sector. American Express and Intel were the two biggest losers on the Dow. |
| Analysts, who have said for months that the financial markets were due a correction after a long period of rising prices, urged calm. | Analysts, who have said for months that the financial markets were due a correction after a long period of rising prices, urged calm. |
| "The latest decline takes us back to where we were 17 November," said Greg McBride, chief financial analyst at Bankrate.com, which tracks interest rates. | |
| "We've just given back some recent gains, not wiped out anyone's life savings." | "We've just given back some recent gains, not wiped out anyone's life savings." |
| But the declines have led to questions for President Donald Trump, who had repeatedly boasted of the market's rapid rise in value last year. | But the declines have led to questions for President Donald Trump, who had repeatedly boasted of the market's rapid rise in value last year. |
| The White House said on Thursday markets were reacting to data that is good news for the broader economy, including low unemployment and signs of wage growth. | |
| "The president like the rest of the White House is concerned about long term economic indicators and factors," a White House spokesman said. "The fundamentals in terms of the long term are very strong." | "The president like the rest of the White House is concerned about long term economic indicators and factors," a White House spokesman said. "The fundamentals in terms of the long term are very strong." |