Dow plunges almost 700 points as bond fears haunt stocks

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The Dow Jones Industrial Average fell 19.42 points, or 0.08 percent, to 24,893.35.

Equity market choppiness picked up in afternoon USA trading, though the Cboe Volatility Index, known as the VIX.VIX, the most widely followed barometer of expected near-term volatility for the S&P 500 index, eased after rising sharply earlier in the week.

U.S. Securities and Exchange Commission Chairman Jay Clayton said he "can't really say" what caused the dramatic drop in stock prices during recent trading sessions, but that all signs indicate financial markets are functioning normally.

The Canadian dollar was trading lower by 0.26 of a cent at 79.32 cents US.

"This increased volatility had been one that the market was anticipating at the start of the year, but certainly took its time to arrive and may retain a spot in the market after this week's tumultuous turn".

In small-caps, the Russell 2000 Index closed at 1,507.97 for a gain of 0.80 points or 0.05%.

The S&P 500 last confirmed a correction in January 2016, when it fell 13.3 percent amid concerns about a slump in oil prices. This brings it close to what is known as a "correction", which is often described as a fall of 10 percent.

And that should lift stocks, making them a far better investment even if bond yields do drift above 3% over the next year or two.

As of 6.30 am ET, the Dow futures were slipping 224 points, the S&P 500 futures were shedding 24.75 points and the Nasdaq 100 futures were slipping 57.50 points.

Japan's Nikkei rose 2.9 percent, and Hong Kong's Hang Seng Index rose 2.68 percent.

The US indices ended the trading session on red territory.

The retreat in equities had been long awaited by investors as the market climbed steadily to record high after record high with few bumps.

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While Tuesday saw USA equities roar back, the momentum may already be slipping - Asian and emerging equity gains fizzled while S&P and Dow Jones futures were nearly 1 percent lower.

"It's like a kid at a child's party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge", said David Kelly, the chief global strategist for JPMorgan Asset Management.

The Nasdaq composite fell 63.90 points, or 0.9%, to 7,051.98.

The yield on the 10-year Treasury bond ticked higher again on Thursday morning, to 2.88%.

Bond yields turned higher after a sharp drop Monday.

USA 10-year yields rose back as high as 2.80 percent after approaching two-week lows around 2.65 percent on Tuesday.

It was a steep spike in yields last Friday that sparked the initial Wall Street rout, forcing sales by a host of highly leveraged funds, which ramped up volatility and drove yet more selling.

Buy orders were placed on a wide range of issues in the morning, following a rise in the Dow Jones Industrial Average in NY on Tuesday.

Torsten Slok, chief worldwide economist at Deutsche Bank, told the Financial Times: "Markets are coming to the conclusion that the USA economy is close to overheating and therefore that the risks of inflation are bigger than the risks of a recession".

US crude oil fell 76 cents, or 1.2 percent, to close at $63.39 a barrel in NY.

Several other companies also have announced employee bonuses or enhanced benefits since Republican lawmakers and President Donald Trump sped a $1.5 trillion tax cut plan into law at the end of a year ago.

USA crude fell 1.72 percent to $60.73 per barrel and Brent was last at $64.56, down 1.45 percent on the day. Microsoft and JPMorgan Chase each lost 1.7 percent.

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