Published: Fri, February 09, 2018
Health | By Jay Jacobs

US Dow Jones plunges over 1000 points

US Dow Jones plunges over 1000 points

United States stocks rebounded in volatile afternoon trading on Tuesday, with major indexes up more than 1 percent following the biggest one-day drops for the S&P 500 and the Dow in more than six years.

The rout marked a stark turnabout in investors' mood from just two weeks ago, when indexes set their latest record highs. The last bear market was during the 2008 financial crisis. Hong Kong's Hang Seng index closed down 5.1 percent, and markets in Australia, South Korea and China also lost ground. The energy and technology sectors led losses. That's good for the economy, but investors anxious it will hurt corporate profits and that rising wages are a sign of faster inflation. Positive U.S. economic data, such as stronger wage growth and low unemployment, has raised Wall Street's odds that Federal Reserve policymakers will raise interest rates faster than anticipated.

In corporate news, shares of Twitter soared 12.15 percent to 30.18 US dollars apiece on Thursday, after the social network delivered better-than-expected quarterly results and reported its first-ever quarter of profitability.

However, those relatively small percentage movements overnight were closer to what markets expected, compared to the Dow's 4.6 per cent (1,175 point) drop earlier this week. Boeing, Goldman Sachs and Home Depot took some of the worst losses.

To put the day's move in a broader context, the point drop in the Dow (which is a basket of 30 large US company stocks versus the 500 or so stocks in the S&P) was just 2.1 percent. It hasn't been that low since mid-November.

The broad-based S&P 500 dropped 100 points or 3.75%, and the tech-rich Nasdaq was down 3.9%.

"A big down day like Monday doesn't just go away".

"When we were going up faster than we should, nobody questioned that", she said. "In January we talked about the fear of missing out".

"I'm not ready to call the bottom", Frederick said.

The losses were broad. It was the busiest day of trading on the New York Stock Exchange since November 10, 2016, two days after the presidential election.

After hitting a high two weeks ago, USA stocks started to tumble last week after the Labor Department said workers' wages grew at a fast rate in January. While U.S. companies mostly did well at the end of 2018, a number of them had a weak finish to the year.

Alexandra Coupe, associate director investment manager PAAMCO, said rising inflation makes stocks less attractive as a place to invest. The company also issued a disappointing forecast. The stock dropped $28.24 to $59.80. A 3 percent yield is looked upon by investors as a sign that investors are fleeing the risk of stocks for the relative safety of bonds.

Online delivery company GrubHub soared after it announced a partnership with Yum Brands, the parent of Taco Bell and KFC. GrubHub jumped $19.13, or 27.4 percent, to $89.04.

The technology-laden Nasdaq and S&P also tumbled lower Thursday with each seeing losses of almost 4 percent.

"Shares were down sharply at the start of London trading but after a 3 percent drop the FTSE 100 recovered a bit of the lost ground". Treasury yields were flat today while the stock market plunged. Nvidia also guided higher on Q1 revenue.

This was the third fall of more than 500 points for the Dow in the last five days and the index is now down 10% from its peak on January 26, a fall known as a "correction", The Guardian reported.

The Dow was little changed at 24,334 as of 10.49am local time (4.49am Wednesday NZT).

Bond prices wobbled and turned higher.

Benchmark Treasury yields rose after the Treasury Department sold new 10-year notes to soft demand and the US Senate reached a budget deal, possibly adding to pressure on stocks. Switch was down 14 cents, or 0.90 percent to $14.83. The S&P closed below the intraday low it had hit on Tuesday, a key level traders had been watching. Brent crude gave up 70 cents, or 1.1 percent, to $64.81 per barrel. Many factors were behind the rapid rise: The ever-improving economy and job market, business optimism, record corporate profits, and the big business tax cut, which Republicans made law.

The 3 percent pullback Thursday across USA indexes is something that did not happen in all of 2017.

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