Dollar Ends 7-Week Gain on Oil Slump Before Fed Meeting
Hurdles Appear Higher for Next Stock Market Bounce
There Are Numerous Obstacles and Possibly More Sharp Swings
By E.S. Browning
Dec. 14, 2014 4:21 p.m. ET
This is the year of sudden tailspins.
In January, April, July and September, U.S. stocks took sharp dives, only to recover and hit new highs. Now they are diving again, with the Dow Jones Industrial Average down 3.8% last week, its worst week in three years.
Many money managers expect another rebound, but the market faces numerous obstacles and, possibly, more sharp swings.
The root cause has been similar for each selloff: soft global growth, creating trouble for investments in commodities, junk bonds and risky stocks. The selling has spilled over to the broad indexes because of investor unease that stock prices are high across the board.
The flash point this time was plunging oil prices, which hurt both stocks and junk bonds issued by energy companies. Europe’s continued growth problems made things worse.
Money managers said they saw signs of panic among short-term traders, who sent the Dow down 315 points on Friday to 17280.83, and that made many uneasy.
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