Major U.S. stock markets entered a second week of uncertainty Monday, with more losses in Asian and European markets leading to a seesaw day on Wall Street.
The Dow Jones industrial average was down sharply on its opening, falling more than 70 points in early trading. It recovered in the late morning, just to fall below its opening in the early afternoon.
After a mid-session recovery, prices dipped back into negative territory, closing more than 63 points — 0.53 percent — off Friday’s 12,114 close.
This is the eighth day out of the past nine that the Dow has lost ground.
Losses on the NASDAQ were more severe, with the index dropping more than 27 points to 2,340. The S&P 500 was also off 13 points, closing at 1,347.
Monday’s losses follow a week in which the Dow fell by more than 4 percent, ending an extended bull run that dated back to July.
The recent sell-off has been attributed to a number of factors, including comments made by former Federal Reserve Chairman Alan Greenspan that the United States is headed toward a recession, plus weakness in Asian and currency markets.
The erratic Monday session on Wall Street followed steep losses on foreign exchanges. Japan’s Nikkei index lost 3.3 percent, falling for the fifth day in a row. Indexes in Germany and Britain also were off.
Analysts were split as to when this slide will stop.
“If it’s just a correction, it’s going to take another week to play out,” said Steve Sachs, director of trading at Rydex Investments. “I thought [recent losses were] the beginning of something, not the end of something.”
“The fundamentals of the market are strong, earnings are strong, balance sheets are strong,” said Bill Swanson, a financial adviser at Edward Jones. “I don’t think [the slide] is a sign of weakness in the long term.”
Michael Farr, president of Farr, Miller and Washington, an investment management firm in the District, warned weakness in the subprime mortgage market could hurt some area residents. Subprime mortgages are given to people with poor credit and were popular during the recent housing boom.
Farr said higher mortgage rates are taking more money about of consumer’s pocketbooks, bringing confidence down and forcing more borrowing.
