Traders Watching to See if Two-Day Sell-Off is Just the Start
With two straight decidedly down days for stocks, traders are wary about whether the sell-off could be a minor correction or a “big one.” U.S. stocks have dropped amid a global selling spree, which began after China manufacturing data showed contraction and created fears of a global growth slowdown. Emerging markets also felt the brunt of the pain, with currency weakness from Istanbul to Buenos Aires. Traders expect continued volatility and more selling into next week when the Fed is expected to decide on further curbing its bond buying program. On Friday, the Dow Jones and S&P 500 both broke below their 50-day moving averages. Plus, the VIX, which measures market fear, incurred double-digit percentage gains. A few strategists forecast a correction of 10 percent or more into their outlooks for this year. But the consensus is that the market to end the year higher, even after last year’s 30 percent gain.