A correction is around the corner

US STOCKS plunged into the red for the year last week, and could fall into correction territory this week - the first time since 2011.

The broad Standard & Poor's 500 fell 2.6 per cent last week, and is now down almost 5 per cent from its record high on April 2. The last time the S&P 500 lost more than 10 per cent from a peak was almost three years ago, when it fell 19 per cent from an April high, amid phobia about the "debt ceiling".

Last week, strategists at brokerage Goldman Sachs said the current downturn would likely meet the 10 per cent threshold, citing bloated valuations. The Nasdaq Composite, weighted toward the more richly valued technology sector, is a hair's breadth from an official correction, down 8.5 per cent from its April high.