NEW YORK (AP) - The Dow Jones industrial average plunged more than 1,000 points as a weeklong market swoon continued.
The Dow is 10 percent below the record high it set just two weeks ago, putting it in what is known on Wall Street as a “correction.”
The Standard & Poor’s 500, the benchmark for many index funds, is also 10 percent below the record high it set two weeks ago.
Worries about inflation set the market rout in motion last Friday, and many market watchers have been predicting a pullback after the market’s relentless march higher over the past year.
The Dow dropped 1,032 points, or 4.1 percent, to 23,860.
The S&P 500 gave up 100 points, or 3.8 percent, to 2,581. The Nasdaq lost 274 points, or 3.9 percent, to 6,777.
Stock trading turned volatile over the last several days, breaking an unusually long period of calm. European markets were also lower after the Bank of England said it could raise interest rates in the coming months.
After huge gains in the first weeks of this year, stocks tumbled Friday after the Labor Department said workers' wages grew at a fast rate in January. That's good for the economy, but investors worried it will hurt corporate profits and that rising wages are a sign of faster inflation. It could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy.
"Far and away the most important things are the fear that the Fed is going to make a mistake, and higher wages are going to cut into margins," said Scott Wren, senior global equity strategist for Wells Fargo Investment Institute. The worry, he said, is that the Fed will raise interest rates too quickly.
The S&P 500 shed 58 points, or 2.2 percent, to 2,622 as of 3:10 p.m. Eastern time.
The Dow Jones industrial average lost 631 points, or 2.5 percent, to 24,262. Boeing and Caterpillar took some of the worst losses. The Nasdaq composite fell 164 points, or 2.3 percent, to 6,887.
Tom Martin, senior portfolio manager with Globalt Investments, said he didn't see anything specific moving the market lower today, just a continuation of a shift in investor mindset from fear of missing out in a rising market to worry of clocking big losses in a market that's turned.
"This is going to take longer to work out than people expect," he said. "In January we talked about fear of missing out. What we have now is what I call fear of getting caught."
The losses were broad. Four stocks fell for every one that rose on the New York Stock Exchange, and 10 out of the 11 industry sectors in the S&P 500 index were down.
High-dividend stocks including phone companies fell. Those stocks are often seen as substitutes for bonds because they tend not to fluctuate that much in price and provide steady income. Those stocks fall out of favor when bond yields rise, as they have been for the past few months, and many expect the trend to continue. The yield on the 10-year note was as low as 2.04 percent as recently as September.
The market didn't get much help Thursday from company earnings reports, several of which disappointed investors. While U.S. companies mostly did well at the end of 2018, a number of them had a weak finish to the year.
Hanesbrands, which makes underwear, T-shirts and socks, reported a smaller profit than investors expected, and its forecast for the current year didn't live up to analysts' estimates either. The company also said it will pay $400 million to buy Australian retailer Bras N Things. The stock dropped $2.11, or 9.6 percent, to $19.85.
IRobot, which makes Roomba vacuums, plummeted 30 percent after projected a smaller annual profit than Wall Street was expecting. The stock dropped $26.75 to $61.29.
Twitter had a banner day, soaring 12 percent after turning in a profit for the first time. Its fourth-quarter revenue was also better than expected. The stock rose $3.32 to $30.23.
Online delivery company GrubHub soared after it announced a partnership with Yum Brands, the parent of Taco Bell and KFC. GrubHub will provide the delivery people and technology to let people order food from those restaurants. GrubHub jumped $17.85, or 25.5 percent, to $87.76 while Yum Brands dipped $1.94, or 2.4 percent, to $78.19.
Bond prices wobbled and turned lower. The yield on the 10-year Treasury note rose to 2.85 percent from 2.84 percent.
After a sharp loss Wednesday, benchmark U.S. crude lost 64 cents, or 1 percent, to $61.15 a barrel in New York. Brent crude, the international standard for oil prices, gave up 70 cents, or 1.1 percent, to $64.81 per barrel in London.
Wholesale gasoline remained at $1.77 a gallon. Heating oil lost 1 cent to $1.92 a gallon. Natural gas gave up 1 cent to $2.70 per 1,000 cubic feet.
Stocks in Europe declined and bond yields increased after the Bank of England said could raise interest rates in coming months because of the strong global economy. That also sent the pound higher. Britain's FTSE 100 fell 1.5 percent and the French CAC 40 lost 2 percent. Germany's DAX declined 2.6 percent.
In Tokyo the Nikkei 225 index rose 1.1 percent. South Korea's Kospi gained 0.5 percent and the Hang Seng of Hong Kong rose 0.4 percent.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jayt
Alex Veiga in Los Angeles, Youkyung Lee in Seoul and Kelvin Chan in Hong Kong contributed to this report.
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