Weekend Economists Examine (E)sc(h)atology January 24-26, 2014

[Demeter]

18. U.S. stocks tumble; Dow drops 318 points; Indexes post worst weekly losses in more than a year

http://www.marketwatch.com/story/us-stocks-sell-off-another-triple-digit-drop-for-dow-2014-01-24?siteid=YAHOOB

U.S. stocks finished the week with deep losses as investors fled equities and emerging-markets currencies on concerns about a contagion effect from China’s manufacturing slowdown. The S&P 500 and the Dow Jones Industrial Average recorded their worst weekly losses in more than a year while volumes on Wall Street on Thursday and Friday were significantly higher than their 30-day averages.

The S&P 500 SPX -2.09% closed below the psychologically significant level of 1,800 for the first time since Dec. 17, dropping 38.17 points, or 2.1%, to 1,790.29. The benchmark index shed 2.6% over the past week, its worst weekly percentage loss since June 2012. The index is now 3.1% below its record high, reached Jan. 15. The trading week was shortened by Monday’s Martin Luther King Jr. Day holiday.

The Dow Jones Industrial Average DJIA -1.97% dropped 318.24 points, or 2%, to 15,879.11 and lost 3.5% over the week, its worst weekly percentage decline since 2011. The last time the blue chip index had two consecutive days of triple digit losses were in Dec 11. and Dec 12.

The Nasdaq Composite COMP -2.15% lost 90.70 points, or 2.2%, to 4,128.17 and registered a weekly loss of 1.7% after two weeks of gains. On Friday, the tech-heavy index reversed its early 2014 gains and is now down 1.2% since the start of the year. Read the recap of the U.S. markets on the live blog

The CBOE Volatility Index VIX +31.74% , known as the Vix, surged 32%, its steepest rise since the April 15 Boston Marathon bombings.

Investors began selling stocks and emerging-markets currencies heavily on Thursday following weak Chinese economic data. The sharp selloffs on Wall Street prompted some analysts to call it the beginning of a long-awaited correction.