It was another rough and tumble week for Wall Street as investors showed the market rout might not yet be done.
With the stock market registering record lows even on the same days indexes opened well into the green, the week from Feb. 5 through Feb. 9 was wild. Here are the biggest moments.
Down Go Stocks
By the closing bell Friday, the Dow registered a gain of 332 points, or 1.38%. Despite the gains, the index still endured its worst week in two years and shed 5% from Monday through Friday. The S&P 500 gained 1.49%, and the Nasdaq pushed higher 1.44% at the close.
On Monday, Feb. 5, the Dow gave back 1,175 points for its biggest single day point decline in history. Just three days later on Thursday, Feb. 8, the index reported its second-biggest single day point decline with a 1,032-point drop. On Tuesday, Feb. 6, though, the Dow closed higher by a hefty 2.33%. Thursday's losses were enough to push the blue-chip index into correction territory, down more than 10% from a Jan. 26 high of 26,617. The S&P 500 followed a similar track - higher only Tuesday and Friday this week. The S&P 500 broke below its 100-day moving average on Thursday, and briefly below its 200-day average Friday before rebounding.
- What You Must Know as Stocks Near One Important Technical Breaking Point
- 3 Amazing Dividend Stocks to Buy With the Dow in Turmoil
Volatility was the name of the game this week. The Cboe Volatility Index (VIX) , known as Wall Street's fear gauge, jumped astronomically this week. By the close of trading Friday, the index had fallen nearly 15% after trading far higher earlier in the session. But, the index gained 65% in the past five days.
Bond Yields Soar
This week's market sentiment appeared to be volatility up, bond yields up, stocks down. By the end of the trading week, bond yields had surged, reaching as high as multi-year records. On Friday, the 10-year Treasury bond yielded 2.848%.
Experts Weigh In
TheStreet's founder and Action Alerts Plus portfolio manager Jim Cramer explained that the market is no longer a 9:30 a.m. to 4:00 p.m. beast. A lot of what contributed to this week's whipsaw came in after-hours trading. Cramer also explained the dangers of treating volatility as an asset class, noting the absurdity of trading the Cboe Volatility Index as its own class with affiliated products.
Jordan Belfort, the "Wolf of Wall Street," told TheStreet that investors need not worry about market mayhem. "This is sort of just the wakeup call that there should be some volatility in the market," Belfort said. He noted that "as long as economic and market fundamentals remain strong, stocks are set to go back to upward momentum soon enough."
Inspire Brands, owner of Arby's and Buffalo Wild Wings, CEO Paul Brown explained that he feels much calmer as the head of a private company in this market downturn than he might if his firm were public. He noted that the core of his audience is middle America, a group that doesn't experience as direct an effect from stock market moves as others might. He also pointed out that although major selloffs now are scary, the market is still leaps and bounds ahead of where it was just one year ago.
Calls Say Don't Panic
A number of market pros came out this week to tell investors there's no need for panic. A note from BofA Merrill Lynch Tuesday explained that the Fed isn't the source for market disruption, as many have suggested. Analysts submitted that Fed action as a result of inflation won't come unless other foreign powers make the first move. For now, at least, there's no real threat from inflation and subsequent central bank action domestically.
And in another BofA note Friday, analysts said, "Absent a broad and sustained deterioration of financial conditions, we think the U.S. economy will brush off this recent move in equities." BofA highlighted the fact that a stock market selloff hasn't spread to any other asset classes, either, including rates, foreign exchange or gold. Plus, the Fed has maintained an even-keeled public image this week. The Fed doesn't respond to short-term swings, meaning their lack of commentary on equities market swings suggests they don't see this period lasting very long.
In a note from UBS Wealth Management Wednesday, research suggested the best way to optimize returns is to avoid falling victim to the blood-in-the-water mentality. "Reducing performance monitoring from a daily to a monthly basis increases the likelihood of seeing positive returns from 54% to 61%, and to 77% if monitoring performance just once a year," UBS wrote. "The more frequently we see losses, the more risk-averse we tend to become - the bad news is that the more frequently you monitor your portfolio the more likely you are to see losses."
Tech Stocks Get Routed
When it comes to the market's favorite stocks, the tech group known as FAANG, this week was a bloodbath. The average FAANG stock lost 7.8% this week, slightly worse than the 7.3% drop for the Nasdaq Composite.
- Action Alerts Plus holding Facebook (FB) - Get Report : -6%
- Action Alerts Plus holding Apple (AAPL) - Get Report : -6.1%
- Amazon (AMZN) - Get Report : -6%
- Netflix (NFLX) - Get Report : -11.2%
- Action Alerts Plus holding Alphabet (GOOGL) - Get Report : -11.5%
The best way to keep up with this volatile market is with TheStreet's executive editor Brian Sozzi and his Morning Jolt. Get it all right here: