Dow may test 18,000 on rate hike fears

GOLDILOCKS was rudely awoken by the bears in the US stock market last week which came in the form of a rate-hike pledge - and she may be gone for good.

After a Federal Reserve official gave another stern warning that hikes could come by the end of the year, the Dow Jones Industrial Average fell by almost 400 points to 18,085.45. This means the Dow could slip to the psychologically significant levels of around 18,000 this week and shed all the summer's gains.

The moves were so small in the last five weeks that they made the past month one of the sleepiest Augusts in market history. The slumber was so deep and the Goldilocks-like complacency so entrenched that Friday's jolt was almost a relief, even for the bulls.