US stocks plunge toward their worst loss in six months

Cornelia Mascio
Ottobre 11, 2018

U.S. President Donald Trump has been briefed on Wednesday's stock market sell-off, a senior White House official told CNBC, as the Dow Jones Industrial Average dropped more than 3 percent in one day and the S&P 500 marked its biggest daily decline since February.

Meanwhile, the Nasdaq Composite dropped 315.97 points, or 4.08 percent, and the Dow Jones Industrial Average was down 831 points, or 3.15 percent.

The S&P 500 was down 55 points, or 1.9 percent, at 2,824-on pace for its worst day since June. Earnings season should improve investors' moods through the end of the year, he writes, with a cycle peak in 2020 and the next major low not due until 2020. Berkshire Hathaway dipped 4.1 per cent to $214.64 and reinsurer Everest Re slid 4.6 per cent to $218.97. Concerns about consumer spending have also led to jitters about USA companies as they prepare to unveil results for the third quarter of the year over the coming weeks.

Bond prices fell. The yield on the 10-year Treasury rose to 3.23 percent.

"If investors are going to take profits then it will be from some of the bigger, high-growth names", Nauman said. But eventually the high rates worry stock investors, as higher rates tend to increase borrowing costs and cut into profit margins.

USA government bonds resumed a selloff after rising to multi-year highs last week, with the 2-year yield rising to 2.906%, its highest level since June 2008.

The biggest driver for the market over the last week has been interest rates, which began spurting higher following several encouraging reports on the economy.

Sears Holdings plunged 32 percent after the Wall Street Journal said the debt-laden retailer was preparing for a possible bankruptcy. With unemployment at a 48-year-low, that trend is finally starting to change, raising fears that inflation, which has also stayed historically low, could flare up, eroding the value of stocks, salaries, your house, and pretty much everything-and chasing some skittish investors out of the stock market.

The Dow and the S&P 500, the benchmark for many index funds, lost more than 3 percent. A move of more than two deviations, or 40 basis points now, leads to negative S&P 500 returns, Goldman says.

Sears has closed hundreds of stores and sold several famous brands or put them on the block as it sees more customers abandon its stores.

USA 10-year Treasuries, a closely-watched indicator of bond yields, hit a seven year high of 3.26pc on Wednesday.

US crude settled down $1.79 at $73.17 per barrel and Brent fell $1.91 to settle at $83.09.

CVS dipped 0.1% to $79.40 and Aetna added 0.5% to $204.64. Natural gas rose 0.6 per cent to $3.28 per 1,000 cubic feet. Heating oil fell 1.2 per cent to $2.39 a gallon.

The CAC 40 in France dropped 2.1 per cent, Germany's DAX lost 2.2 per cent and the FTSE 100 in London fell 1.3 per cent. As bond yields rise, risk-averse investors-ranging from the proverbial cautious retiree to big pension funds-become more willing to park more money in bonds and collect the interest. The British pound rose to $1.3197 from $1.3146.

The dollar fell to 112.59 Japanese yen from 113.05 yen late Tuesday.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE