Dow Jones drops 1,000 points for the second time in a week

After showing signs of recovery, major indexes register more sharp drops

Traders work the floor of the New York Stock Exchange (AP Photo/Richard Drew)

The stock market plummeted again, extending a period of volatility that has unravelled historic gains and offering evidence of a sustained correction.

The Dow Jones Industrial Average dropped by more than 1,000 points, a plunge that followed a record 1,175-point loss earlier in the week.

And in a sign of a potential long-term development, at the day's end both the Dow and the Standard & Poor's 500 index were down at least 10 per cent from a previous high registered in January. That is the thresh hold that signals a market correction.

It has been a hair-raising week for investors as a stock market that had steadily risen to historic highs shed value and oscillated between rebounds and fresh declines.

Positive indicators emerged later in the week as the markets finished higher, though not before a rollercoaster day that saw rises and falls of hundreds of points.

But markets closed sharply down again at the end of Thursday, suggesting that the tumultuous week represented not a temporary blip but a longer-term correction.

The Dow Jones' 1,000-point drop translated to a 4 per cent decline in value. The S&P declined by 3.7 per cent and the Nasdaq was down 3.9 per cent.

After Donald Trump spent months touting historic stock market values, his administration has taken to underscoring other economic data, like the unemployment rate, that they say show underlying stability.

“The president, like the rest of the White House, is concerned about long-term economic indicators and factors, and the fundamentals in terms of the long term are very strong,” White House spokesman Raj Shah told a White House press briefing.