Markets Show Signs of Recovery after Dow Drop

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Markets in Europe and Asia are showing signs of recovery after the U.S. stock market had its worst day of the year.

In the United States, the Dow Jones industrial average plummeted 353 points.

"It's like a perfect storm out there this week," DME Securities' Alan Valdes said.

The fall came after Federal Reserve Board Chairman Ben Bernanke announced the Fed may start pulling back from its economic stimulus efforts. That will bring higher interest rates, and some investors fear it will harm economic growth.

Housing prices are increasing in many parts of the country and that's good news for sellers. But buyers are now paying 1 percent more for a mortgage. Interest rates on most home loans are now up to more than 4 percent.

Also, commodity prices fell Thursday.

  • Gold plunged by nearly $88 to $1,286 an ounce.
  • Silver fell 8.3 percent.
  • Oil had its biggest decline since last November, dropping to $95.40 per barrel in New York.
  • Gasoline futures fell more than 3 percent.

Still, some economists say the public should not be alarmed because the economy is improving. Last month, 175,000 jobs were added and so far this year, the stock market is up more than 10 percent.

Most analysts believe Thursday's market slide was just a correction, not a sign of more volatility to come. They believe the markets are simply adjusting, coming to terms with a new reality as the period of U.S. government stimulus may be nearing an end.

"Our economy is getting better, and now it's time for us to see how we can do on our own," Jonathan Corpina, senior managing partner with Meridian Equity Partners, said.

"Once we get through that period, I think we're going to realize that we're going to be okay and that things are going to get back to normal," he said.

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