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United States stocks plunge further, Dow drops 830 points

12 October, 2018, 04:40 | Author: Kristi Dunn
  • New York City. With bond prices dropping interest rates have been surging resulting in the Dow Jones Industrials Average falling over 200 poin

The Dow Jones Industrial Average lost 545.91 points, or 2.1 percent, to 25,052.83 after falling as much as 698. The International Monetary Fund cut its outlook for global growth this week, citing interest rates and trade tensions.

Technology stocks slid more than 2 percent, the most among the 11 major S&P sectors, with the Philadelphia Semiconductor index down 3 percent after Swiss vacuum valve maker VAT Group said demand from chip equipment makers was softening.

Investors may want to shift out of momentum and into more defensive stocks - companies that aren't as expensive and also pay healthy, stable dividends.

The tech sector was hit hardest, with Netflix down almost 7 per cent, Amazon down 5 per cent and Apple, Google and Facebook all down more than 3 per cent.

"The speed of changes in bond yields often matters more for equities than the level", Goldman Sachs strategists said in a note.

President Trump blasted the Federal Reserve for raising interest rates. Technology companies were among the losers, with the Nasdaq Composite dropping more than 2% to 7,575.34. The two-year yield rose to 2.88 percent from 2.87 percent, and the 30-year yield climbed to 3.38 percent from 3.37 percent. Higher rates increase borrowing costs, pinching corporate profits.

Stocks were lower at the halfway point Thursday in volatile trading, with the Dow Industrials down more than 1,000 points over two days.

This time around, strong economic data anxious bond investors, who sent the benchmark yield on Tuesday to 3.261 percent, the highest since early May 2011.

The yield on the 10-year Treasury note fell to 3.13 percent from 3.22 percent late Wednesday. Apple shares fell 1.2 percent.

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Today technology stocks saw their worst overall day since 2011 as investors concerns continue to mount over rising interest rates.

Earnings season kicks off with reports from JPMorgan Chase, Citigroup and Wells Fargo.

Globally, France's CAC 40 dropped 1 per cent and the DAX in Germany lost 0.6 per cent. Britain's FTSE 100 sank 1.3 per cent. Delta Air Lines shares rose 3.8 percent after the airline beat profit expectations.

As long as earnings and the U.S. economy are continuing to grow, this market pullback will wind up being a healthy dip Alexander said.

The renminbi had fallen "significantly" during the year and the Treasury Department is monitoring this "very carefully" to make sure China wasn't manipulating its currency to gain an advantage in the trade war, Mnuchin told the Financial Times in an interview.

Oil prices slumped to two-week lows as global stock markets fell, with investor sentiment made more bearish by an industry report showing USA crude inventories rising more than expected. The Nasdaq composite rose less than a point to 7,422. Heating oil shed 2.6 percent to $2.33 a gallon.

The rates rose Wednesday after the government released data showing the producer price index rose 0.2 percent in September and is up 2.8 percent on a year-over-year basis.

The dollar slipped to 112.17 Japanese yen from 112.27 yen late Wednesday.

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