Volatile markets: Dow drops 500 points then gains it back

The FTSE 100 followed global stocks into the red

After a swing of about 1,200 points during the session, the Dow Jones Industrial Average finished with a gain of 567.02 points, or 2.33 per cent, at 24,912.77, near its session peak.

The market's sharp drop began on Friday as investors worried that creeping signs of higher inflation might push the U.S. Federal Reserve to raise interest rates more quickly, which could slow down economic growth by making it more expensive for people and businesses to borrow money.

Both the S&P 500 and the Dow Industrials slumped more than 4 percent on Monday, their biggest falls since August 2011.

This tremendous decline to the stock market was alarming for many folks we talked with on Main Street in Sarasota.

So far, the Dow, Standard & Poor's 500 and Nasdaq have not fallen enough to be in a correction.

At 4:07 p.m., the Toronto Stock Exchange's S&P/TSX composite index was up 29.12 points, or 0.19 per cent, at 15,363.93.

"The catalyst for the biggest U.S. equity sell-off for six years is being blamed on a delayed realization that inflation pressures are rising perhaps more quickly than anticipated", said James Knightley, economist at Dutch bank ING.

Gold futures fell 0.9 per cent to US$1,321.1 an ounce, weighing on some mining stocks.

Keep the sell-off in perspective, warned Kristina Hooper, chief global market strategist at Invesco. "The market on average every three or three and a half years will correct 5 to 10 percent". He said the market was a long way from turning into a bear market, a period when the market pulls back 20 percent from its record high. The DAX index in Germany fell 294 points, while the FTSE 100 in England plummeted 193 points.

White House press secretary Sarah Sanders downplayed the stock market drop as a part of a normal seesaw of the market but maintained that the overall direction of the economy under Trump is strong. And the U.S. stock market proved a point yesterday.

Using the stock market as the leading proof point of your economic successes is a fool's errand.

Although the Nikkei 225 recovered slightly it is still 4.7% lower than opening levels, trading around 21,610 points by 9.24am.

BERLINER: Yeah. We're getting close to a correction, and it wouldn't be surprising if we have one.

Known as Black Monday in America, this was the day that 22.61 per cent was lost from the Dow Jones.

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