>>> TODAY IS TUESDAY, FEBRUARY 6. OUR TOP STORY TODAY, ANYBODY WITH INVESTMENTS IN THE STOCK MARKET IS KEEPING AN ANXIOUS EYE ON THE NEWS TODAY AS VOLATILITY HITS THE MARKET. WHAT DOES IT MEAN FOR THE AVERAGE SAN DIEGO AND TRYING TO MAKE AND -- ENDS MEET AND SAVING OF MONEY TO KEEP THEIR FAMILY ON A STABLE FOOTING. WE HAVE A GUEST WHO WILL HELP US MAKE SENSE OF THIS. THANK YOU FOR JOINING US. WE ARE FINDING OUT EVEN A BIG DROP DOESN'T NECESSARILY MEAN THAT EVERYBODY SHOULD PANIC RIGHT ? >> I AGREE, I DON'T THINK PEOPLE SHOULD PANIC AT ALL. THE PERCENTAGE DROP IN THE MARKET IS ONLY AROUND 4.6% AND THEY WILL CALL IT A CORRECTION AT 10% AND 20. >> REMINDED US OF THE OTHER ECONOMIC MEASURES. >> YOU WILL LOOK TO CLAIMANT, THE SALARIES ON THE RISE OR IF THERE LEVELING OFF, YOU WILL LOOK TO SEE HOW PEOPLE FEEL ABOUT THE ECONOMY, A LOOK AT WHETHER OR NOT THE TAX INCENTIVES THAT THE PRESIDENT HAS PUSHED THROUGH AND HOW THAT IS REACTING TO THE MARKET, THE NEW [ INDISCERNIBLE ] COMING IN SO I DON'T THINK IT'S ANY ONE THING. I THINK IT'S A COMBINATION OF FACTORS THAT GIVE YOU THE OVERALL TEMPERATURE TO DETERMINE THE HEALTH OF THE ECONOMY. EVERYBODY HAS TO REMEMBER, EVEN THOUGH THE 2018 GAMES HAVE BEEN WIPED OUT IT HAS BEEN FIVE WEEKS. THE MARKET IS SO FAR ABOVE RECORD-BREAKING NUMBERS THAT PEOPLE SHOULDN'T REALLY PANIC. >> OR OTHER MARKETS AROUND THE WORLD REFLECTING WHAT'S HAPPENING IN THE UNITED STATES ? >> PRETTY MUCH. ASIA IS DOWN 4% WHICH IS NOT SURPRISING. I THINK EVERYBODY AROUND THE WORLD LOOKS AT WHAT'S GOING ON BEYOND THE STATE. >> IS BASICALLY HAPPENING ACROSS THE GLOBE. >> YOU CAN MOVE FROM STOCKS TO BONDS AND OTHER TYPES OF VEHICLES THAT ARE MORE IN FLEXION PROOF. THE BIG CONCERN WOULD BE IF THE MARKET CONTINUED TO GET OVERHEATED THAT WE WOULD BE IN INFLATION TERRITORY WHICH WOULD PUSH IT -- US INTO RECESSION. >> USING THE RECENT TAX REFORMS HAD ANYTHING TO DO WITH IT ? >> I DON'T THINK THE TAX REFORM HAD ANYTHING TO DO WITH IT. I THINK THIS WAS SOMETHING THAT SHOULD'VE BEEN HAPPENING EARLIER. IT'S SOMETHING THAT HAPPENS ON ITS OWN BETWEEN COMPUTER ALGORITHMS TRADING MOVES BASED ON INFORMATION THAT IS FIT INTO THE COMPUTERS. WHEN CERTAIN THINGS HAPPEN, THE COMPUTERS AUTOMATICALLY START MAKING THOSE ADJUSTMENTS. MOST PEOPLE'S 401(K)S ARE PROBABLY FINE. >> I UNDERSTAND THAT PEOPLE'S WAGES ARE GOING UP WHICH COULD BE ONE OF THE TRIGGERS -- TRIGGERS TO. >> WHAT THEY ARE LOOKING AT, IF THEY GO UP TOO FAST THAT CAN ALSO CAUSE INFLATION. I DON'T THINK THERE IS ANY ONE PARTICULAR ITEM THAT YOU COULD LOOK TO AND SAY THIS IS WHY IT HAPPENED. >> IN SOME WAYS CAN YOU THINK OF THIS AVERTING A SITUATION. I KNOW ECONOMISTS WERE LOOKING AT THIS LONG PERIOD OF GROWTH AND WONDERING WHEN IT WILL END. >> I THINK IT SHOULD'VE HAPPENED SOONER. IF IT CONTINUED I THINK THE ADJUSTMENT WOULD'VE BEEN FAR WORSE. >> MY ADVICE WOULD BE STAY CALM AND STAY PUT. JUST HAVE PATIENT MONEY AND LET IT RIDE. >> DO YOU THINK INVESTORS IN GENERAL NEED TO GET MORE TOLERANT OF MARKET VOLUNTARILY ? >> I THINK THE MOST IMPORTANT THING WOULD BE SOMEBODY EDUCATING THE AVERAGE INVESTOR NOT THE PROFESSIONAL AS TO WHAT THEY SHOULD UNDERSTAND ABOUT THE VOLATILITY. >> HOW WOULD YOU DESCRIBE YOUR RELATIONSHIP BETWEEN THE STOCK MARKET IN THE WORLD THAT WE LIVE IN AS A WHOLE ? >> I THINK THE ECONOMY AS A WHOLE IS ON THE RIGHT TRACK. I THINK PRESIDENT OBAMA HAS HIS PLANS AND POLICIES AND HEALTHY -- TO HELP THE ECONOMY GET BACK ON HIS FEET AND NOW WE ARE MOVING FORWARD. AS LONG AS EVERYBODY DOESN'T DO STUPID THINGS I THINK THAT THE PRESIDENTS TAX REFORM DID GIVE A BUMP TO THE MARKET BUT I DON'T THINK IT'S THE ONLY THING THAT DID IT. >> LOOKING FORWARD WHILE YOU PREDICT FOR 2018 ? >> I THINK 2018 WILL BE FINE. I THINK YOU WILL SEE VOLUNTARILY IN THE MARKET UNTIL EVERYTHING SHAKES OUT. I LOOK TO WORLD EVENTS TO SEE WHAT WILL TAKE PLACE. IF EVERYTHING STAYS WHERE THEY ARE WE SHOULD HAVE A GOOD 2018. >> THANK YOU VERY MUCH.
After big swings higher and lower, U.S. stocks are up slightly in afternoon trading Tuesday as investors look for calm after a global sell-off. The swings came one day after the steepest drop in 6 ½ years.
Major indexes in Asia and Europe fell following Monday's 1,175-point drop in the Dow Jones industrial average. Investors remain fearful that signs of rising inflation and higher interest rates could bring an end to the bull market that has sent stocks to record high after record high in recent years.
The Dow Jones industrial average fell as much as 567 points shortly after the opening bell, then jumped as much as 367 points in the first half-hour of trading. It's switched between gains and losses several times since then.
The index, which is comprised of 30 big-name U.S. companies, was up 79 points, or 0.3 percent, to 24,4112 as of 1:17 p.m. The Standard & Poor's 500 index, a broader market barometer that many index funds track, was up 1 point at 2,650. The Nasdaq composite gained 35 points, or 0.5 percent, to 7,003.
RELATED: Wall Street Roller Coaster: Dow Jumps Higher After Plunging At Open
The steep drops Friday and Monday wiped out the gains the Dow and S&P 500 made since the beginning of the year, but both remain higher over the past 12 months. The Dow is still up 21 percent over that time, the S&P 500 16 percent.
The S&P 500 fell 6 percent Friday and Monday, and it's down 7.6 percent from the recent record high it set on January 26. That's less than the 10 percent drop that is known on Wall Street as a "correction."
Corrections are seen as entirely normal during bull markets, and even helpful in curbing excessive gains and allowing new investors to buy into the market at lower prices. It has been an uncommonly long time since the last market correction, which ended almost two years ago. That meant Tuesday was likely to be one of the most watched days on the markets in years.
Despite the big swings, Tuesday's trading looked similar to the patterns that have shaped the market for the last year: investors bought retailers like Amazon and Home Depot and technology companies, which do better when economic growth is strong.
Travel bookings site TripAdvisor was one of only two S&P 500 companies that finished higher on Monday. On Tuesday it rallied another $3.95, or 11.1 percent, to $39.57.
The biggest losses went to high-dividend companies including utility and real estate companies, as bond yields increased after a sharp drop on Monday. The yield on the 10-year Treasury note rose to 2.78 percent from 2.71 percent. Higher Treasury yields make high-dividend stocks like utilities less appealing to investors seeking income.
The market mood turned decidedly fearful the last two days. Friday's U.S. jobs report showed wages grew at a faster pace in January, and investors worried that that means inflation is speeding up, and that the Federal Reserve will have to raise interest rates faster than previously expected in order to keep that inflation in check. Higher rates act like a brake on the economy by slowing down borrowing and lending.
Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, said the plunge wasn't caused by inflation fears alone. The markets have been unusually calm since late 2016, and he said investors were betting that would continue.
"People were positioned for more central bank easing or continued central bank easing, low rates, and importantly, low volatility," he said. "Corrections are caused by people having to reposition for new environments."
Schutte added that corrections can end quickly, and they often do so when investors see evidence of continued economic growth. Experts do think the global economy will keep growing this year even though that is likely to bring more inflation. Schutte said that as central banks stop propping up the market, trading will probably be more volatile in the next few years.
Investors often buy gold when they're worried about market volatility, but they aren't doing that now. Gold fell 0.4 percent to $1,330.70 an ounce and silver dipped 0.3 percent to $16.61 an ounce.
Among the biggest losers Tuesday was Tokyo's Nikkei 225 stock average, which ended 4.7 percent lower. Hong Kong's Hang Seng skidded 5.1 percent and South Korea's Kospi declined 1.5 percent.
In Europe, Germany's DAX fell 2.3 percent and the CAC 40 in France lost 2.3 percent. The British FTSE 100 index fell 2.6 percent.
U.S. crude oil fell 27 cents to $63.88 a barrel in New York. Brent crude, the international standards, lost 48 cents to $67.14 a barrel in London.
The dollar fell to 109.43 yen from 109.70 yen. The euro dipped to $1.2385 from $1.2399.
On Monday, the Dow finished down 4.6 percent while the S&P 500 sank 4.1 percent. The last fall of that size came in August 2011 when investors were fretting over Europe's debt crisis and the debt ceiling impasse in Washington that prompted a U.S. credit rating downgrade.
