Roller coaster day for the Dow upends investors, may lead to low - KPTV - FOX 12

Roller coaster day for the Dow upends investors, may lead to lower rates and gas prices

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NEW YORK (KPTV) -

The news wasn't good from Wall Street Monday. It was a roller coaster of emotions during a roller coaster day of trading at the New York Stock Exchange.

Monday’s drop of 588 points was the biggest daily drop in years. Most analysts said the huge drop was driven by deep fears about China's economic slowdown.

The Dow Jones plummeted an unprecedented 1,000 points in just the first four minutes of trading Monday. It started to make a slow recovery before still closing with the biggest one-day loss since 2008.

So why is China causing so much unrest in domestic markets? China is the world's second-biggest economy, and its explosive growth in the last two decades has been the engine for the global economy.

But now that growth has been slowing in recent months, and Monday all Asian markets also suffered major losses.

The question many investors in the U.S. have tonight is, “What does this mean for me?”

Financial experts have two pieces of advice - don't panic and don't touch that 401k.

“The nature of the 401K is to take advantage of the good times, to take advantage of the bad times and over the course of years, that all sort of helps smooth out those returns, and helps investors deal with that volatility,” Christine Romans, Chief Business Correspondent with CNN, said after markets closed.

Even with all the news about the big drop, there is a silver lining for consumers.

Drivers could be seeing cheaper gas soon thanks to a drop in crude oil prices. For the first time in six years, oil is now priced below $39 per barrel.

Just last June the price was $100 dollars per barrel, and some experts said another big drop could happen in just three weeks. By Christmas, some analysts predict gas could be $2 per gallon.

Another upside is for potential homeowners, as there is now less of a chance interest rates will go up next month.

The Federal Reserve is set to meet in September to talk about the rates, and as of Monday, traders contend they only see a 24 percent chance they will rise, down from 46 percent just about a week ago.

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