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Dow Jones closes down nearly 1,200 points | ABC News Special Report - YouTube
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this is an ABC News special report
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George Stephanopoulos good afternoon
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we're coming on the air now with news
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from Wall Street one take to the floor
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the stock has changed there you see the
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Dow down more than a thousand points
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right now coming on top of a more than
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600 point loss on Friday that puts the
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Dow in negative territory for this year
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down a little more than 4% right now but
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of course this comes on top of a healthy
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gain in the stock exchange over the last
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year if you look back to when President
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Trump was inaugurated back in January
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2017 the Dow is below 20,000 now about
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24,000 so close to a 25% rise since 2017
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but it has been a tough day on Wall
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Street right now as we approach the
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closing bell the Dow continues to drop
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now down about 1,100 points I'm here
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with our chief business correspondent
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Rebecca Jarvis in Rebecca this would be
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the largest point drop ever in doubt
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history but far from the worst day
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that's right George if you look at this
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in point terms we will close somewhere
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down about 1100 points today
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that's sizeable but nowhere near as bad
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as it was on September 9th 2008 when the
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Dow fell 777 points and that was a near
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7% fall that day we've just come a lot
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farther since then that's why the
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percentage terms today are still down
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four point six percent but notice Matt
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is Matt that famous Black Monday in 1987
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with the Dow dropped more than 20% but
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it's suddenly at one point today the Dow
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is now about 1,600 points was even worse
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that was even worse it was looking like
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we could be in that negative 7%
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territory so we've come up from there
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but George as we were speaking about
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earlier there were a number of veterans
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on Wall Street who have been feeling
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like something is coming that that this
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is meant to be that something we were
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going to see a sell-off like this at
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some point in time given how far stocks
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have come in the last year up 22 percent
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in the last year right but the economy
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is still quite strong the jobs report on
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Friday 200,000 jobs were added the wage
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gains are happening and that's what we
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were really waiting on those wage games
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and some of that actually can have a
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negative impact on this market because
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as wages and jobs improve it gives more
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reason for the Fed to hike interest
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rates which in turn can weigh on stocks
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we have now had the closing bell there
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you see it right there the down about 11
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seventy-eight points right now that'll
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settle for a few more minutes but of
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more than four percent loss today coming
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on top of a six hundred point drop on
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fried of course that has wiped out the
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gains in the Dow for the year Rebecca
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Jarvis he'll be joining David Muir
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tonight on world news all of you at home
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can get the latest breaking news anytime
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by downloading the ABC News app and I'll
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see you tomorrow on GMA this has been a
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special report from ABC News
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[Music]
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hey guys I'm nineveh's here we're
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continuing to watch the Dow there you
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see it's dropping to the lowest level of
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this year essentially wiping out many of
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the gains from last year the markets
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have now closed its down over a thousand
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points we're gonna bring some analysis
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explain to you exactly what you are
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seeing here so stay with us right now
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though White House earlier today just
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moments ago was asked to respond to some
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of these drops obviously the president
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has been quick to tout the many economic
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gains over the last calendar year many
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of them result as of the tax cuts as
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well he was speaking earlier in
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Cincinnati Ohio at Scheffer corporation
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touting some of those tax reforms and
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the many gains in the economy since they
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went into place all the while this is
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what happened was happening with the Dow
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take a look at where the markets are
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closing today this of course comes on
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the heels of a drop last week as well on
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Friday the Dow closed 666 points down
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other major indices as well also closing
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down but the White House responding to
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that today saying look this is part of
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the normal and flow of the market and
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the overall direction of the economy
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under president they say remains strong
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so let's try to put some of this into
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context now Rebecca Jarvis ABC's chief
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business and economics correspondent
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joins me now Rebecca a lot of people are
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looking at this number and wondering
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what the heck is going on so tell me
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what's happening is so if you look at it
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in terms of what's happened over the
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last couple of days it doesn't look good
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the last couple of days the market has
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wiped out the gains for the year if you
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extend your picture and your horizon to
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a longer span of time if you look at
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over the last year the market even after
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all of these declines is still up 22
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percent over the last year and if you
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look at the last five years the markets
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still up about 75% so aamna people are
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oftentimes looking at this trying to put
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it into real terms in real terms what
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that means is if you put a thousand
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dollars into your 401k five years ago
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you would now have about two thousand
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dollars in that 401k today even after
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everything that we've been through over
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the last couple of days here in Rebecca
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this number is just one indicator
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obviously there are other economic
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indicators we have
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pay attention to jobs wages consumer
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spending and behavior what can we say
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about where we are with those well those
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continue to trend upward what we've sent
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what we saw on Friday with the jobs
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report 200,000 jobs added in the month
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of January wages rising at their fastest
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pace in eight years all of that on the
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surface is good news it's good news for
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workers people who have been waiting for
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those wage increases and I should say
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there are about 50% of people in this
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country about half of Americans who
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don't even have money invested in the
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stock market so where they would really
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feel that benefit is in the wage
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increases and what we've seen is those
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wage increases are starting to pick up
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and overall that data on the economic
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level is looking good in particular for
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workers the issue
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Amna is that the Federal Reserve for
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many years now throughout the financial
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crisis and leading to the current days
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has kept interest rates near rock-bottom
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lows and at some point the Fed has to
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start increasing interest rates the
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concern right now on Wall Street is that
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we've hit that time that moment in time
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where the Fed starts to hike and
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interest rates start to rise well when
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interest rates start to rise that means
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the cost of borrowing goes up so people
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and businesses tend to borrow less money
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and tentar and less money that can weigh
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a little bit on the overall economy so
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Rebecca we've been hearing this word
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correction for a while this is that
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correction what can we expect how long
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could it last well if this is that
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correction a correction is 10% so we are
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already most of the way there at this
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point in terms of the last couple of
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trading sessions it could very likely
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stay volatile for a number of days here
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and one of the things that that Wall
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Street tracks to look at that volatility
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is something called the VIX some people
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will call it the fear gauge on Wall
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Street and today that gauge of
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volatility spiked 75 percent and really
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I'm not part of that is because we just
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haven't seen that much volatility while
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the market has continued to chug along
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and and basically put in new highs over
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the last year we haven't seen a lot of
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volatility and that volatility certainly
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is going to create some white-knuckle
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days for people but at the same time
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it's something to keep in mind that
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again if you go back and you look over
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the last year in the last five years
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it's really the long word trajectory
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that people out there should be thinking
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about when it comes to their 401k when
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it comes to setting aside money in their
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nest egg and over time if historically
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you look back at the markets over time
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you have these years of highs and lows
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but over time in general the market
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returns on average 7% year-over-year
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that's why it's all about investing for
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the long term and not trying to time the
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market not trying to look at a day like
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today and say oh I need to sell
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everything or a great day and think oh I
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need to buy everything because to put
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that into context a couple of weeks ago
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January 26 the market made a new
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all-time high so if you were going along
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that line of thinking of trying to time
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everything and you said oh it's time to
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buy well you wouldn't be feeling so
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great today a much-needed perspective
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there from Rebecca Jarvis and much more
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coming from her tonight on world news as
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well Rebecca thanks so much thanks aamna
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thanks to you as well head over to ABC
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News com get the latest on this story
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and many others or download the ABC News
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app get all the breaking news right to
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your phone for now I Mom nineveh's and
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I'll see you back here soon
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