Friday, August 21, 2015 4:16 PM EDT
Stock prices around the world continued to plunge on Friday, threatening to end one of the longest bull runs in the history of the United States stock market.
A searing six-year rally in United States stocks had advanced into the summer months, shrugging off challenges like the dispute over Greece’s debt. But in the last two weeks, world markets tumbled as investors grew increasingly concerned about developments in China, which unexpectedly devalued its currency last week, and the outlook for the economies of other large developing countries.
As the selling gathered steam Friday afternoon, some benchmark indexes were at or near 10 percent below their recent peaks — a “correction” in Wall Street parlance. “This is likely going to go down as the first meaningful correction in four years,” said David Rosenberg, an economist and strategist at Gluskin Sheff.
The Dow Jones industrial average, for instance, is more than 10 percent below the high it reached in trading in May. At the end of trading, the index was down more than 500 points, a loss of about 3 percent on the day.
The Standard & Poor’s 500-stock index, a broader benchmark, fell below the psychologically important 2,000 mark. It was down 3 percent on the day and more than 7 percent below its recent peak. The Nasdaq, which contains a lot of technology stocks, fell 3.5 percent on Friday, a slide that takes the index nearly 10 percent below its latest high.
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