Steep stock market losses, gains not signs of recession

- The work week ended with another wild ride on Wall Street. The Dow Jones Industrial Average lost almost 300 points in Friday's session. The NASDAQ and S&P 500 also saw losses that keep them in "correction" territory, more than 10 percent off their recent highs.

Collectively, global financial markets have lost five trillion dollars in value in October.

Financial analysts point to a variety of reasons for the sell-off. Rising interest rates mean an end to cheap, easy money to borrow. Consumer sentiment is down for the month and generally, decent third-quarter corporate earnings reports have included some stagnant expectations for the future.

It all points to market volatility.

"People play that, 'Oh my gosh, it's the financial crisis all over again,'" says Rich Rosso of Clarity Financial. "What you're seeing now is how people should expect markets to behave, going forward."

The U.S. Department of Commerce report released on Friday stated that the national economy grew by 3.5 percent in the third quarter. It's a strong indicator that another recession is not right around the corner, but economists warn that recessions do happen regularly. It's just a question of how strong and how long they last.

Economists also say market fluctuations are a barometer of how the economy is performing.

Up Next:


  • Popular

  • Recent

More from FOX 26 Houston