The Standard & Poor 500 index’s drop last week of 10 per cent from recent highs meant the benchmark index is now in a correction amid a rally that started on March 2009.
On Friday, stocks snapped a three-day losing streak as investors bought beaten-down shares including banks. But for the week, the Dow and the S&P were off around 4 per cent and the Nasdaq fell 5 per cent.
Analysts said economic data due this week and investors’ speculation that equities may have fallen too much could lead to a rebound in the market. But with the downside momentum strong on anxiety over European debt issues, the market could easily turn and create increased volatility.