Today, all the news seemed to be about Facebook (Nasdaq: FB ) and its long-awaited IPO. But after pricing at the upper end of its expected range, the social-media stock quickly gave up opening gains to finish the day very close to its offering price, disappointing anyone who expected to make a quick profit on a first-day pop.
For the rest of the market, though, morning gains once again turned into afternoon losses, with the declines accelerating toward the close. The Dow Jones Industrials (INDEX: ^DJI ) finished down 0.6%, while the Nasdaq Composite (INDEX: ^IXIC ) fell more than 1% and the S&P 500 (INDEX: ^GSPC ) lost another 0.75%. All three measures fell every single day this week and posted their worst week of the year by far.
At this point, major benchmarks are at or nearing corrections of 10% from their highs. For the Dow, the official correction level would be 11,950, which is still a pretty substantial drop from current levels. But the corresponding level for the S&P is around 1,275, which would require only another 1% fall. The Nasdaq, meanwhile, is already in correction mode, with today's drop through 2,810 making it official. There's nothing magical about the 10% figure, but it does provide one perspective on the recent decline.
It's also important to understand that some less widely followed markets are suffering even bigger declines. U.S. small caps have fallen more dramatically than the Dow, and international stocks have gotten hit particularly hard, especially in emerging markets. ETFs tracking the Brazilian and Indian markets have fallen more than 20%, qualifying as full-fledged bear markets. Meanwhile, interest rates continue to drop, with the 10-Year Treasury Yield (INDEX: ^TNX ) down to 1.7%, leaving investors with losses after inflation and taxes. With all the uncertainty around the world, further declines could continue until someone -- whether from a government or the private sector -- takes a leadership role toward resolving the many problems the world economy faces right now.
See what next week brings
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