Wall Street erases gains after Fed decision

US stocks retreat from records ahead of packed week for corporate earnings

It contributed about 110 points to the Dow Industrials. The Dow Jones Industrial Average declined 38 points, or 0.1%, to 26,572. ADP said the United States created a better-than-expected 234,000 private-sector jobs in January. The amount outpaced expectations of 185,000 jobs.

The Standard & Poor's 500 index rose 1.38 points, or 0.1 percent, to 2,823.81.

The Dow opened with a 261-point leap on Wednesday, then gave up all those gains and more, then bounced back into the green to finish up 73.

In Asia, shares climbed on Thursday in early trade, tracking gains seen on Wall Street following the Fed's decision to keep rates unchanged.

Elsewhere, the Stoxx Europe 600 swung between small gains and losses and closed down 0.2% following its biggest daily fall of the year.

Up until Tuesday, the S&P 500 had enjoyed a record-long streak without consecutive drops of 0.5%, according to Bespoke Investment Group.

Some analysts said the early-week decline was triggered by investors taking chips off the table. They generally move extremely slowly and they only produce big price swings when the company produces good or bad trading results, which may only happen a couple of times a year at best. London's FTSE 100 fell 0.8 percent.

The CBOE Volatility Index, a near-term gauge of investor anxiety, reached a high of 13.23 on Monday, its highest level since December 1.

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Despite the drama in the market this week, Wall Street has enjoyed a robust start to 2018.

Pointing to the chart below, Higgins says "it is quite common for interest rates, government bond yields and equity prices to rise at the same time", adding the caveat that it usually requires investors to have a "growing appetite for risk and a positive view of corporate earnings". The sharp increase in bond yields is finally becoming a topic of discussion. Rising yields make bonds more appealing to investors seeking income, but they can also lead to higher financing costs for companies, homebuyers and other borrowers. Apple was down another 1 per cent, still feeling the effects of news that the company will halve production of its $999 iPhone X smartphone. Chipmaker Advanced Micro Devices added 72 cents, or 5.6 percent, to $13.59, while Electronic Arts rose $11.58, or 9.8 percent, to $130.28.

The technology sector's 0.50 per cent drop weighed the most on the markets, but the biggest decliners were the defensive sectors - utilities, real estate and telecoms, all down more than 0.8 per cent as USA 10-year treasury yields hit their highest since 2014.

The U.S. stocks finished relatively higher and sharply so on Friday. "Investors have become too complacent with low interest rates".

The VIX, Wall Street's fear gauge, has soared about 35% this week to the highest level since August.

The central bank raised rates three times past year and sees three additional hikes in 2018 even as it continues to trim its balance sheet on a largely pre-set schedule.

Health care took a beating Tuesday.

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