Published: Fri, October 12, 2018
Markets | By Erika Turner

Markets Right Now: US stocks slump on day of wide swings

Markets Right Now: US stocks slump on day of wide swings

Amazon skidded 4.8 per cent to $1,781.21 (U.S.). Investors bet on the falling trend and also awaited the beginning of earnings reports, causing many sectors and index exchange-traded funds to report record losses.

At the closing bell, the Dow Jones Industrial Average had lost 3.1% or 830 points to finish at 25,613.35, in the biggest fall since February.

Oil prices fell more than two percent as US stocks plunged, even though energy traders anxious about shrinking supply from Iran due to US sanctions and kept an eye on Hurricane Michael, which closed almost 40 percent of US Gulf of Mexico output. The Dow fell 832 points, or down 3.15 percent.

The markets landed in the red despite a government report that showed consumer prices rose 0.1 percent last month, less than expected.

"I don't see evidence right now that this is a one-off event", he said.

"Clearly stocks are spooked by higher rates and maybe some inflation that seems to be creeping in", said Michael Farr, CEO of Farr, Miller & Washington. "But this nothing to be overly concerned about", Alexander said. "Hopefully earnings will take us away and we can focus on the fundamentals".

Stock futures pointed to an early decline on Wall Street Thursday as global indexes tumbled, with popular tech companies getting hit the hardest. "The market's starting to say that the glass may be half empty". Delta Air Lines shares rose 3.8 percent after the airline beat profit expectations.

The Dow Jones Industrial Average fell 545 points after dropping 831 points Wednesday.

Apple gave up 4.6 percent to $216.36 and Microsoft dropped 5.4 percent to $106.16. "We're hoping for a quiet day tomorrow". Even utility stocks, which tend to pay big dividends, fell slightly Wednesday. JPMorgan and Bank of America are each down close to 1.5 percent.

US stocks are tumbling for the second consecutive day as the market's recent downturn gets worse. On Wednesday, the 10-year yield once again touched its highest level in seven years.

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Innes, the Singapore-based head of Head of Trading for Asia Pacific with OANDA, attributed the slide to a combination of factors, including the possibility further interest rate hikes and the battle over tariffs between the USA and China. "Fear is being transmitted from market to market", he said.

They also make bonds more attractive investments.

The market had been calm from late June through September as investors were satisfied with continued economic growth, strong company profits, and signs of progress in trade talks between the US and several partners, although the USA remained at odds with China. "[It is] likely that this negative sentiment could roll over to the Asian markets in the short term", she wrote.

The Fed has been gradually raising interest rates over the past two years, after not having increased them since the recession.

"The Fed is making a mistake".

At the same time, the burgeoning trade war between the U.S. and China has been creating uncertainty on corporate earnings.

The meeting came as Beijing - and investors worldwide - are waiting to see whether the Treasury Department labels China a currency manipulator next week in a report that could potentially set off a new round of recriminations between the two economic giants. Those stocks have made huge gains for years, but they're now out of favor. China has been the main target for these rules.

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.

Asia stock indexes added to the global market's pain on Thursday, with benchmarks in Shanghai, Shenzhen and Tokyo all skidding between 4 and 5 percent.

Shih reported from Hong Kong.

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