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Dow plummets 1,000 points after opening bell, suffers worst day in four years

1 year 4 months 3 weeks ago August 24, 2015 Aug 24, 2015 Monday, August 24 2015 August 24, 2015 3:52 PM in News
Source: ABC News
By: Susanna Kim

NEW YORK – The Dow closed down nearly 600 points, about 3.58 percent, at the closing bell Monday, its worst day in four years.

The Dow Jones industrial average fell more than 1,000 points in early trading but recovered some losses during the late morning. By 3 p.m., the blue-chip index was down again about 600 points, about 3.6 percent.

ABC News reports that Monday’s loss comes on the heels of a Friday dive. On Friday, the Dow lost about 530 points and shares continued to plunge Monday due to concerns about China's economic slowdown.

Mark Zandi, chief economist with Moody's Analytics, told ABC News that trading Monday was driven by differing degrees of fear.

"Investors were panicked at the start of the day, and while they seemed to get a grip on their feelings by mid-day, they remain unsettled as the trading day ended," Zandi said. "While watching the stock market action today has been disconcerting, it has all been consistent with a garden variety stock market correction, at least so far."

According to Zandi, households with stock or retirement investments shouldn't run for the exit yet.

"Most importantly, the average investor should not panic," Zandi said. "If you are invested in stocks, you should have an investment horizon of at least four to five years and should look through any market volatility." 

Older investors with a 401(k) or another investment vehicle may be feeling anxious about their retirement, but Zandi said this could be an appealing time for younger investors with more an appetite for risk.

Zandi said the stock market tumbled the last couple days because of the economic slowdown in China and increasing prospects for the Federal Reserve to soon raise interest rates.

The sharp slide in oil prices is also hurting market sentiment, as the outlook for energy-related companies have significantly darkened, Zandi said.

 

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