Stocks Drop for Second Straight Day, Experts Say A Few Factors Could Explain Why

Thursday was another down day for the Dow, as stocks could not recover from one of their biggest point drops in history.

The Dow fell nearly 832 points on Wednesday as stocks continue to struggle this October.

Take a look at Wall Street on Thursday:

The Dow fell close to 550 points ending the day at 25,052.

The Nasdaq lost nearly 100 points to 7,329.

The S&P 500 dropped 57 to 2,728.

“We are meeting with people and just letting them know what’s going on. Stocks have been overdue for a pull back,” OsborneKlein Managing Partner Shaun Osborne, CFP, said.

Financial advisers say it’s way too early for a panic as anxious investors watch the stock market take a tumble.

“You see large points like 800, when in fact that’s just a few percentage points, as I said before it’s just a month and half of good performance that has been erased,” Osborne, explained.

Osborne says the economy remains strong when everything is put into perspective.

“We are sitting at a good economic environment with low unemployment, great GDP growth, strong earnings for companies,” Osborne, added.

Osborne says the sharp decline can be attributed to a couple different factors.

“We’ve seen treasury rates elevate here lately. Trade tensions with China, we’ve been dealing with tariffs and trade wars but the one that’s left on the table is China,” Osborne, added.

But how is the fed raising interest rates (typically a sign of a strong economy), hurting stock prices?

“Business costs start to increase a little bit and as that happens people get a little more fearful, in just having money in the stock. Uncertainty can lead to a response and I think we saw some of that response [Wednesday],” North Central Michigan College Economics Professor Rod Anderson, said.

Anderson believes there are no signs the trend will continue.

“As of right now I really see no serious reason that we start to doubt whether that the economy is going to continue its positive roll, as long as that’s true, the stock market should follow its path. The evidence is not there to suggest that this is a long-term downtrend,” Anderson, added.

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