Dow Ends Sharply Higher After Early Plunge Of More Than 500 Points
NEW YORK (CBSNewYork/AP) -- Stocks closed sharply higher on Wall Street after another turbulent day of steep ups and downs.
The Dow Jones industrial average gained 567 points, or 2.3 percent, recouping nearly half of the 1,175-point plunge it took the day before.
The index of 30 big-name U.S. companies ended up at 24,912.
On its way there, the Dow took several harrowing turns during the day, opening with a plunge of 567 points -- coincidentally, the exact same amount it wound up gaining at the closing bell.
The broader Standard & Poor's 500 index rose 46 points, or 1.7 percent, to 2,695. The Nasdaq climbed 148, or 2.1 percent, to 7,115.
Big drops Friday and Monday erased the Dow's gains for the year. By Tuesday, it was once again slightly higher for 2018
Monday's 1,175-point drop in the Dow, about 4.6 percent of its value, capped two days of losses that have erased the stock market's gains for the year. Monday's nosedive was the worst-ever one-day point decline. The Dow is still up 21.3 percent over the last 12 months.
Many analysts say after record growth, that was a correction.
"The stock market has gone too far, too fast," said James McBride, managing director of the McBride Group. "It's just appropriate to hit the reset button."
"This is to be expected because we've gone since 2008 without even a correction meaning the stock market being down at least 10 percent," CBS News financial correspondent Mellody Hobson said.
On Wall Street, traders took Monday's drop in stride, noting the tremendous changes in the markets since crashes like the one in 1987 that saw the Dow lose nearly 23 percent of its value in a single day.
"I honestly don't think there's much to panic about," said NYSE options broker Kirk Katzburg.
Market professionals warn that the selling could continue for a bit. But many are also quick to say they see no recession looming, and they expect the strengthening global economy and healthy corporate earnings to help stock prices recover.
"The reasons for the increase in rates is the stronger economy," said Ernie Cecilia, chief investment officer at Bryn Mawr Trust. "The reasons are positive. It's not as if something like 2008 or financial Armageddon is coming."
But if you're one of the millions invested in funds that track the S&P 500, a broader measure of market health, you're still up 16 percent since President Donald Trump took office.
"I don't think anyone's that worried yet, see how it goes for the next few days," said Westfield, New Jersey resident Tom Garry. "For right now it's not unexpected there would be some kind of correction at this point."
Advice for you from financial planners is don't panic. If you have money in the market, view it as a long-term investment that over the long run, will grow.
"What would happen if i put $10,000 into the stock market right after the president was elected? Even with this two day sell off, that $10,000 would be worth $13,280 today," said CBS News business analyst Jill Schlesinger.
"Over the long term you average a better price if you let the system work. The average American during this period should do nothing. You should not be changing your approach," Hobson said.
On Tuesday, people with 401Ks told CBS2's Janelle Burrell that they're being patient.
"A little correction, we'll be back," said Lower Manhattan resident Hunter Degroot.
"Not a long time before I retire. We survived 2008, we'll survive whatever happens now," attorney Lauren Artese said.
"For the individual investor, we just have to ride this out," said corporate accountant Lawrence Hendricks, who admits he was a little nervous watching the market on Monday. "I first listened to hear what they were saying and then I tuned it out so I wouldn't panic at my desk."
Trump has frequently commented on gains by the market during his first year in office. But a White House spokesman did say Monday, "Markets do fluctuate in the short term."
(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
