Wall Street Continues Taking Tumble [AUDIO]
Stocks fell on Wall Street Monday over fears about China’s economy and rising bond yields luring money away from stocks.
It was the first 5 percent decline, referred to on Wall Street as a “pullback,” since November. Investors remained worried about tightening credit in China.
The Dow Jones Industrial Average fell 139.84 points in all, closing at 14,659.
Markets remain vulnerable to any comments from the Federal Reserve about its $85 billion in monthly bond purchases, which have kept interest rates at historic lows and helped drive the stock market’s rally the last four years.
“Everybody is expecting a pullback, and especially coming into the summer months, the market usually tends to decline after May,” said Chief Investment Officer Chris Cordaro, of Regent Atlantic Capital, in Morristown.
But, he advises stock holders to stay the course for the longterm and make sure your strategy is sound.
Pullbacks that occur during bull markets tend to be “nasty and brutish,” but short, said John Manley, Chief Equity Strategist at Wells Fargo Funds Management.
He said it’s common to get declines of three percent to seven percent “as the market restores a reverence to risk to the investing public.”
Before Wall Street opened for trading on Monday, Asian markets were already sharply lower, led by a 5 percent plunge in China’s Shanghai Composite Index. That was the index’s biggest loss in four years.