Published: Thu, October 11, 2018
Money | By Ralph Mccoy

Dow Jones Industrials Sink 800-plus Points

Dow Jones Industrials Sink 800-plus Points

US stocks dropped sharply Wednesday, as a selloff in technology stocks led the major indices to lows not seen since this spring.

Technology giants have suffered an investor rout that sent United States stock markets falling heavily on Wednesday.

USA stock indexes fell in early trading Wednesday as interest rates nudged higher yet.

Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management, in NY, said: "The big concern isn't really what third quarter earnings numbers are, but really what the outlook for the fourth quarter and first quarters are". "The market's starting to say that the glass may be half empty".

The S&P 500 ITI fell by 4.8 percent as a whole and much of that is attributable to the heavyweight stocks that fell today. That hasn't happened since right before the 2016 presidential election.

Intel fell 2.6 percent and Nvidia 4.4 percent.

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.

Rising bond yields have been drawing investors out of the stock market, and the best-performing stocks over the past year took some of the biggest losses Wednesday. It's fallen 7.5 per cent in just five days. Amazon lost 6.2 percent and Netflix gave back 8.4 percent. Technology stocks fell especially sharply.

Microsoft lost 1.4 percent in early trading Wednesday and 3M gave up 1.6 percent.

Insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 miles per hour.

Japan's Nikkei 225 added 0.2 percent, South Korea's Kospi dropped 1.1 percent and the Hang Seng in Hong Kong gained 0.1 percent.

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PBOC sets the benchmark on the morning of each business day, allowing spot rates to deviate 2 percent above or below the figure. Following the PBOC's move , the offshore yuan was 0.2 percent weaker against the dollar in early trade on Monday.

Shares in upscale jewellery retailer Tiffany & Co and perfume maker Estee Lauder both fell 7 percent after a warning from French luxury goods firm LVMH about softening demand in China. On Tuesday, he reiterated his criticism of the Federal Reserve for raising interest rates, saying that he does not want current economic growth to slow down "even a little bit".

The 10-year Treasury yield remained at 3.20 per cent, about where it was late on Tuesday, after earlier touching 3.24 per cent. The two-year yield rose to 2.89 percent from 2.87 percent, and the 30-year yield climbed to 3.39 percent from 3.37 percent.

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

Gina Martin Adams, the chief equity strategist for Bloomberg Intelligence, said investors are concerned about the big increase in yields, which makes it more expensive to borrow money.

"Amazon recently announced they were increasing wages, Facebook is spending a ton on security", she said.

The S&P 500 was also down 3% while the tech-heavy Nasdaq lost 4%.

Sears Holdings plunged 32 percent after the Wall Street Journal said the debt-laden retailer was preparing for a possible bankruptcy. The stock fell 15 percent to 50 cents. It was more than US$40 five years ago.

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.

Benchmark U.S. crude oil fell 2.4 per cent to $73.17 a barrel in NY. Brent crude, the global standard, lost 65 cents to $84.35.

Wholesale gasoline shed 2.7 per cent to $2.02 a gallon. The energy sector was close behind with a 2.9 percent loss, as oil extraction in the Gulf of Mexico shutting down due to the hurricane.

The CBOE Volatility Index, Wall Street's "fear gauge", rose 2.5 points, gaining for the fifth straight session to hit its highest since June 25.

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