NEW YORK (CNNMoney)
Stocks suffered another drop Thursday morning as concerns about the global economy continue to cause investors to dump risky assets. The Dow plummeted about 200 points and briefly tumbled below the 16,000 level before rebounding a bit.
It's another "yo-yo" day. In a mere hour of trading, there have already been wild swings, but the momentum right now is clearly downward.
The wave of selling over the past month has nearly wiped out the stock market's gains for the year and left all three major indexes flirting with their first "correction" in years.
If the Nasdaq closes below 4,138.37, it would officially be in correction mode, signaling a 10% decline from a previous closing high. It's currently trading around 4,180.
Extreme turbulence has hit the markets in recent days as fears about Europe's economy, the Ebola outbreak and plunging oil prices continue to dent investor confidence. Just look at Wednesday, when the Dow plummeted as much as 460 points but ended the day down "only" 173 points.
"Price action this morning is ridiculous, with currencies, commodities, interest rates, volatility markets, equities, and every other financial asset class whipping up and down almost at random," Bespoke Investment Group wrote in a note to clients.
Related: When will companies stop hoarding cash?
European jitters mount: European growth has slowed to a near halt and some countries, including even economic powerhouse Germany, are teetering on the brink of recession.
Markets in France and Germany dropped more than 1% a piece and the U.K.'s FTSE 100 tumbled nearly 3%. Virtually all European markets are now in correction territory.
Related: This is NOT another financial crisis
New problems are also emerging in the high-debt nations on Europe's periphery. Greece's stock and bond markets have been in free fall this week over worries about the country's efforts to leave its bailout program.
Those worries have spread to Spain. Investors were alarmed by the fact that Spain held a bond auction on Thursday that failed to meet its target. That's never a good sign and highlights the aversion to risk in the markets.
"Spain had been the poster child for European recovery even as the rest of Europe (read: Germany) was faltering earlier this year...This news is bringing that into doubt," Michael Block, chief market strategist at Rhino Trading, wrote in a note to clients.
These concerns help explain why crude oil has plunged 6% this week alone. Oil broke below the $80-a-barrel threshold on Thursday for the first time since June 2012.
Related: What the heck should the Fed do now?
Good U.S. news: There are a number of positive U.S. stories that are offsetting the gloom and doom in Europe.
For example, there's fresh evidence the job market is getting healthier. Claims for first-time unemployment benefits tumbled last week to the lowest level since April 2000.
Also, a number of major companies reported quarterly earnings that exceeded expectations. Shares of Delta Air Lines (DAL) and UnitedHealth (UNH) rallied on their earnings beats.
On the other hand, Goldman Sachs (GS) dropped 2% despite reporting soaring profits and Netflix (NFLX, Tech30) plummeted over 20% on disappointing subscriber figures.
First Published: October 16, 2014: 10:37 AM ET
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