A massive sell-off sent the big U.S. indices into correction territory amid a global rout. But the markets won't enter a bear market, predicts one analyst. Fred Katayama reports.
Stocks plunging at the Monday market open in a rout. The Dow falling more than 1000 points just minutes out of the gate for a 7 percent drop, breaking below the 16000 level for the first time in 20 months. The S&P 500 and Nasdaq joined the blue-chip index by plummeting more than 10 percent from their 52-week highs into what Wall Street calls correction territory. Stocks fell across the board, including defensive sectors like utilities and tech headliners like Apple and Netflix. The global equity rout Monday sparked by a further 8 percent drop in Chinese shares and slide in commodity prices. The dollar dropped sharply against the euro and yen as investors saw a lesser likelihood of the Fed hiking interest rates in September. S&P Capital IQ U.S. equity strategist Sam Stovall said, "History says ... the S&P 500 will likely not slip into a new bear market." He said the pace of its decline, the strong housing market and low inflation level should limit this stock drop to a correction.