NEW YORK (AP) -- The stock market skid that began on Friday worsened. The Dow plunged 1,175 points, erasing its gains for the year.
“Some people would say, and I would agree, that the market’s gone up a little bit too far, too fast,” said James McBride, with The McBride Group, LLC. “So a lot of us were actually hoping for a little bit of a reset here and I think we’re getting it.”
McBride said that the DIJA Dow Jones Industrial Average was up 6% since January when a typical year yields an average of 8% to 10% for the entire year.
While the 4.6% drop was steep, it paled in comparison to Black Monday in 1987 when the Dow Jones lost 22.5% of its value or in 2008 when it shed 18%.
The Nasdaq, which is the market for which many Bay Area tech companies trade, fell 273, or 3.8 percent, to 6,967.
Netflix, Alphabet and Apple are ended trading day lower.
But, McBride points out that while investors may have been rattled, causing a sell-off, it does not mean that tech giants like Apple are no longer a safe bet.
“Apple went down last week because the iPhone 10 earning or sales were a little bit less than people expected, but think about this, the fourth quarters of 2017… Apple revenues were $88 billion dollars. This is a company that’s making almost $1 billion dollars every day. It’s incredible!
Monday’s market volatility also affects the everyday American through their retirement plan.
Terrance Odean, a professor at U.C. Berkeley Haas School of Business says, there is no need to be overly concerned.
“If you panic and sell when the market drops and then sit on the sidelines until there is a big recovery and a lot of people did this in 2008 and 2009… they waited a couple years to get back in and they’re much worse off for having done so.
One of the concerns for the markets going forward is inflation.
The economy has been heating up with unemployment low and workers making more money for the first time in 10 years.
But, analysts worry that all that money being flushed into the economy may lead to inflation, which could trigger the Federal Reserve to raise interest rates faster than planned.