Calm on Wall Street: An uncertain week ends on a placid note

Business

Calm on Wall Street: An uncertain week ends on a placid note

U.S. stocks went into their swoon last week, mostly over signs of a slowdown in China, but this suggests the worst may be over for now. The Dow Jones industrial average fell a scant 11.76 points Friday, or 0.1 percent, to 16,643.01, capping a week that saw stomach-churning losses and gains of around 600 points per day. Even so, investors are buckling their seat belts for more turbulence ahead. Before the six-day losing streak had ended, the Dow had plummeted 1,900 points and the S&P 500 was undergoing its first “correction,” a decline of 10 percent or more, in nearly four years.

But stocks soared at midweek, cutting the Dow’s losses nearly in half, in a rally analysts attributed to bargain-hunting, signs that the Federal Reserve may hold off raising interest rates this fall, and a new report that said the U.S. economy is growing at a more robust rate than previously believed. Still, the concerns that triggered the sell-off remain: slumping oil prices, a slowing Chinese economy, weak corporate earnings forecasts and uncertainty over interest rates. That means there’s likely to be more market volatility ahead, something that history backs up. September has been the worst month for stocks.