Dow Jones drop adds to losses and weekly gloom for stock investors

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Bear Market is a term that sends fear into Wall Street and investors. What does it mean? And how does it affect both Wall Street and Main Street? Adam Shell explains.

Stocks continued their brutal stretch of steep declines Friday, exacerbating a week-long slide that has seen big price swings and persistent drops as investors weigh worries ranging from trade disputes to slowing global growth.

The Dow Jones industrial average was having another rough day Friday, showing a loss of around 600 points in late afternoon trading. That left the blue-chip average down 4.6 percent for the week. All 30 Dow stocks were in the red.

The sell-off by investors sent another major stock gauge — the Standard & Poor’s 500 index — down 2.5 percent, pushing it back into correction territory, or a drop of more than 10 percent from its September high.

Selling this week picked up after a top Chinese telecommunications executive was arrested, a development that raised fears that the 90-day trade fight truce between the U.S. and China, which was already facing skepticism from Wall Street, could face more challenges.

Investors were also rattled by a signal in the bond market that historically has indicated a potential slowdown in the economy.

Wall Street has also been worried about the impact of rising interest rates on the U.S. economy, as higher borrowing costs slow sales of things like homes and cars, which crimps corporate earnings.

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A weaker-than-expected reading on U.S. job growth in November also weighed on investor sentiment. The government reported that 155,000 new jobs were created last month, below the 198,000 analysts had forecast. Still, job growth was not weak enough, Wall Street pros said, to derail the Federal Reserve’s plan to continue hiking interest rates. 

Investors remain concerned that the Fed, which has already hiked rates three times this year, may boost borrowing costs too aggressively and cause a recession. 

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