Transcript for Stock market has biggest 1-day point drop in history
we'll start with that wild ride on Wall Street. Americans closely watching this market after that record-breaking drop and the closing bell rang on Monday the Dow Jones was down 1175 points. ABC's chief business correspondent Rebecca Jarvis starts us off. Markets around the world reacting That's right. Good morning to all of you. We're seeing markets selling off around the globe overnight. This morning, the Dow also poised to open lower but it's been fluctuating a lot. If you look at this last month, the month of February stocks have wiped out over a trillion dollars in value in the span of a few days. In the last five days the Dow down 8% and to put that into real terms if you had invested $1,000 in the market one week ago, today you would have closer to $920. You would have lost about $80 on that bet, Michael. Oh, wow, seems like the economy is strong. What set this off? This is what's surprising. Things are improving and the unemployment rate is low. Wages, those are climbing at the fastest pace in eight years and that's part of the issue here. That has sparked fear. The improving economy has sparked fear after a decade of rock bottom interest rates the federal reserve will start hiking rates to prevent inflation and as those go up, loans get more expensive. People in businesses spend less. That can weigh on the overall economy and, remember, let's put this into context here. Stocks have been rising now for the last nine years, almost consistently over those last nine years up 160%. Pretty unusual to see such a dramatic climb for such an extended period of time and many on Wall Street have been saying at what point is the stock market going to better reflect what's happening in the real economy? If you're in the real economy you've been saying, why is the market up so much? I don't necessarily feel that the market should be up this much. Now we're coming back down to that reality moment. As you both know, investrs get nervous when they see numbers like this drop but H historically as you say it always corrects itself. When you're thinking about the long term here, the hardest thing to do is often the best, staying the course. It's a lot easier said than done but investing for the long term, starting young, giving yourself and your portfolio the time to recover, this is the thing that works for people over time and I want to put this into context. If you had pulled out at the bottom of the market during the great recession you would have lost a lot. If you would have stayed the course within three years you would have had all that back. After the great depression. Yes. Easier said than done sometimes. All right. Thank you both.
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