Markets continue to drop, closing at new low for the year

Sept. 23 (UPI) -- Markets continued to slide Friday, with a fourth consecutive day of losses bringing the Dow Jones Industrial Average below 30,000 to a new low for the year.

The Dow Jones Industrial Average fell 486.27 points, or 1.62%, on Friday, closing at 29,590.41. The S&P 500 dropped 64.76 points, or 1.72% to close at 3,693.23, and the Nasdaq slid 198.88 points, or 1.8%, to 10,867.93.

The Dow nearly reached bear territory, sinking 19.9% from its all-time high of 36,939.84 in January. A bear market is defined as a drop of 20% or more.

Further tightening by the Federal Reserve drove a volatile week of trading as fears of a recession put the financial markets in turmoil.

"The market has been transitioning clearly and quickly from worries over inflation to concerns over the aggressive Federal Reserve campaign," Qunicy Krosby of LPL Financial said, according to CNBC.

"You see bond yields rising to levels we haven't seen in years. It's changing the mindset to how does the Fed get to price stability without something breaking."

On Wednesday, the Federal Reserve raised the federal funds rate by 75 basis points to the range of 3% to 3.25%. Top bank executives warned the House financial services committee of tough times ahead in the fight against inflation.

Markets have fallen five of the past six weeks, with this week's losses totaling 4% for the Dow, 4.65% for S&P 500 and 5.07% for Nasdaq.

"We are now in another downswing in the ongoing bear market," Brad McMillan, chief investment officer for Commonwealth Financial Network said, according to CNN. "This year, there have been four drops and three rallies -- and we are down quite a bit. That doesn't feel good."

Oil prices fell sharply, with the benchmark West Texas Intermediate futures dropped 6% to $78.66 per barrel and Brent crude toppling almost 5% to $85.97 per barrel.

U.S. Treasury yields rose, with the two-year Treasury note soaring past the 15-year high of 4.2% and the 10-year note near 3.7%.

The Fed is expected to cut interest rates further in November.

"Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable and their focus is on the timing, magnitude and duration of a potential recession and investment strategies for that outlook," David Kostin, chief U.S. equity strategist for Goldman Sachs, said according to Yahoo Finance.