Analysis: What's behind the Dow plunge

NEW YORK -- U.S. stocks plunged Friday. The Dow Jones Industrial Average plummeted 666 points, or 2.5 percent -- the biggest percentage drop since June 2016. 

CBS News business analyst Jill Schlesinger said there are two factors behind the plunge: disappointing corporate earnings and fear that economic growth might lead to higher interest rates. Schlesinger called the fear that the economy is growing faster than expected the "real factor" that seemed to spook the market.

The January jobs report, released Friday, was strong -- with unemployment holding steady at the 17-year low of 4.1 percent and wages increasing by nearly 3 percent from a year ago. Schlesinger said the jump in wages could indicate the economy is heating up -- which could lead to inflation. To keep prices in check, the Federal Reserve would have to increase interest rates more quickly than anticipated, although both interest rates and inflation remain very low.

The average long-term investor -- one who doesn't need their money for more than five years -- should "stick to your game plan,"  Schlesinger said. But an investor who needs money within the next year for a house down payment, car purchase or a tuition bill might want pull that money so it's not at risk. 

"That's when I say look you never should have been in the market to begin with," Schlesigner said about those investors. "Cut the risk, get out, and don't tempt fate." 

Economists and analysts have cautioned about the heightened risk of a market correction following months of steadily climbing equity valuations. Based on long-term measures, the U.S. stock market is trading at levels that were last witnessed during the late 1990s, when lofty valuations on dot-com stocks pushed the market higher, according to Oxford Economics.