Friday, August 21, 2015

Dow plunges 531 points - Worst Week Since 2011

America's stock market plunged dramatically Friday, marking its biggest loss of the year.

The Dow plummeted 531 points, concluding its worst week since 2011. Around the world, major indexes also fell for the week and most are negative for the month.

Three big factors are driving this week's worries:

1. Concerns are growing that China's economy is slowing down faster than its government has said.

2. Investors had been preparing for the U.S. Federal Reserve to raise its benchmark interest rate in September. However, the central bank has been sending mixed signals. That's dredging out the market's worst enemy: uncertainty.

3. Oil prices dropped below the key $40 level for the first time since 2009.

The Dow fell into correction mode, down 10% from its most recent high point on May 19.

Overseas stock markets' losses were just as bad, if not worse, with some indexes in China and the U.K. stock market all now in correction.

The S&P 500 was also down 5.7% for the week, its worst weekly performance since 2011, while the Nasdaq fell 6.8%, also in correction territory.

Despite these dire numbers, it's worth remembering that U.S. stock indexes hit record highs earlier this year, after logging double-digit gains in each of the last three years.

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