US STOCKS-Wall Street ends flat in quiet end to dramatic week

31 Aug 2015 | Author: | No comments yet »

Calm on Wall Street: A turbulent week ends on a placid note.

Days after China threw the biggest scare into Wall Street in years, US stocks have come surging back and ended the week Friday on a placid note that suggested 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. The Nasdaq composite added 15.62 points, or 0.3 percent, to 4,828.32. [W]ith or without a sharp slowdown, the bloom is off China’s rose – and that may be a good thing.

The market plunge may prompt people inside and outside China to take a more realistic view that incorporates China’s weaknesses and the transition from its liftoff era to the likelihood of slower growth in the future. 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. “For the last few years, let’s face it, there’s been very little volatility,” said JJ Kinahan, TD Ameritrade’s chief strategist. “We’ve had a very impressive rally. Not that we can’t go higher, but it’s not going to be an easy path to get there.” Despite the bounce-back this week, stocks are on course for their worst monthly performance in more than three years.

Because he recently left his job, Chang has to sell investments he bought with stock options within 90 days — something he can’t do now without taking a big loss. Federal Reserve Vice Chairman Stanley Fischer said Friday that before the recent turbulence, there was a “pretty strong case” for raising rates in September.

It always does.” 12.3: The percentage point decline in the Standard & Poor’s 500 index from its all-time high of 2,130.82, set in late May, and its close on Tuesday.

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