U.S. stock markets have begun to recover after a serious downturn in Chinese stock Tuesday caused shocks in markets around the globe, while raising questions about potential annd prolonged instability. Economic analyst Nick Perna discusses what's next for the stability of U.S. markets.
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It's been a tumultuous 48 hours on the world's markets. The roller coaster began yesterday, when China's benchmark Shanghai Composite Index plunged 8.8 percent. It was China's biggest one-day drop in a decade.
At the same time, other Asian indexes caught the jitters. Japan lost half a percentage point; Hong Kong was down 1.8 percent. In Europe, where trading opens after the Asian markets close, the drop was sharper, down 2.6 percent by close of business. And in the U.S., the plunge was sharper still, down 416 points, or 3.3 percent, wiping out all the gains so far in 2007.
The recoveries today in the U.S. and Chinese markets covered only a fraction of yesterday's losses.