Economy

Dow Jones Industrials Sink 800-plus Points

Dow Jones Industrials Sink 800-plus Points”

Apple and Amazon both had their worst day in two and a half years.

United States airlines were another big loser, with American Airlines sliding 4.1% and Southwest Airlines 3.8% as a major U.S. hurricane caused flight cancellations in Florida.

Alec Young, managing director of global markets research at FTSE Russell, said investors fear that rising interest rates and growing expenses are going to erode company profits next year.

"The tax cuts juiced earnings this year and that's not sustainable", he said.

"Equity markets were pulverized today as investors remain in full out retreat and even the most pessimistic of equity bears are still in shock by the sheer magnitude of the move", he added. That was its worst drop in eight months.

The S&P 500 and tech-heavy Nasdaq joined in Wednesday's carnage, falling 3.3 percent and 4.1 percent, respectively. Eastern time. It's on track for its fifth straight drop, which hasn't happened since right before the 2016 presidential election.

The S&P 500 fell nearly 92 points, or just over 3 percent, the biggest daily loss since February this year.

Wall Street stocks has plunged with major indices losing more than three percent in a sell-off prompted by the sudden jump in USA interest rates.

That's helped make technology stocks more volatile in the last few months.

The Dow Jones Industrial Average closed at 25,598.74 on Wednesday with a loss of -831.83 points or -3.15%.

Apple gave up 4.6 percent to $216.36 and Microsoft dropped 5.4 percent to $106.16.

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Canadian stocks also fell on Thursday, weighed down by a more than 2-per-cent drop in healthcare and energy stocks amid a broad based sell-off in global equities. Berkshire Hathaway dipped 4.1 per cent to $214.64 and reinsurer Everest Re slid 4.6 per cent to $218.97.

Luxury stocks were another casualty of worries of slowing China demand, sparked by LVMH's results.

USA shares are set for big declines when markets open Thursday.

That all played into a market that is increasingly anxious about global growth after warnings from the International Monetary Fund this week and a rise in Treasury yields to a more than 7-year high above 3 percent that signals a tightening of available capital globally.

The Philadelphia Semiconductor index sank 2.64 percent, with Intel down 2.0 percent and Nvidia 4.7 percent.

Bets on market calm, measured by the number of contracts shorting futures for the CBOE Market Volatility Index compared to long contracts, are at a higher level than before the market correction, according to data from the U.S. Commodity Futures Trading Commission. Adams, of Bloomberg Intelligence, said investors have concerns about their future profitability, too.

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

A bear market by many definitions requires a drop of at least 20% in the S&P 500 from a bull-market peak; likewise, a bear market starts counting at a 20% rise out of a deep trough.

Sears Holdings plunged 32 percent after the Wall Street Journal said the debt-laden retailer was preparing for a possible bankruptcy. Stocks plunged in Taiwan and fell across Southeast Asia. A move of more than two deviations, or 40 basis points now, leads to negative S&P 500 returns, Goldman says.

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



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