Wall St. extends slide as Nasdaq flirts with correction

Marcus Newton
October 12, 2018

The Dow Jones Industrial Average fell 545.91 points, or 2.13 percent, to 25,052.83, the S&P 500 lost 57.31 points, or 2.06 percent, to 2,728.37 and the Nasdaq Composite dropped 92.99 points, or 1.25 percent, to 7,329.06.

Investors anxious that equity markets would have trouble recovering as rising interest rates coincide with uncertainty about how much earnings growth would be hurt by a USA trade war with China. The Russell 2000 index of smaller-company stocks fell 22 points, or 1.5 percent, to 1552. The S&P 500 closed at 2,728.38, down 2 percent.

It will take more than a daily stock market correction to stop the Fed from hiking, said George Goncalves, managing director and head of fixed income strategy at Nomura in NY.

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.

Some early relief over a tame report on United States inflation gave way to renewed selling.

The market had enjoyed a stretch of relative calm, where even big intraday losses were erased by the end of the day. It's down 6.7 percent in its current losing streak, its worst downturn since a 10-percent drop in early February.

1 p.m.: This article was updated with the close of markets.

Stocks fell Wednesday as concerns about global economic growth and ongoing trade tensions continued to hang over Wall Street and after the bond market resumed a sell-off that started last week.

Bond prices rose as the recent surge in yields attracted the attention of some investors.

The two-year yield soared to its highest mark since 2008.

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Stocks from emerging markets were also hard hit. Recently a larger-than-normal number of companies have warned that their third-quarter results could be weaker than analysts expected. It was at just 3.05 percent early last week.

Bank shares were boosted as yields rose, with Citigroup and Bank of America seeing gains of 0.4 percent and 0.3 percent, respectively.

Wednesday's wild ride on Wall Street picked up right where it left off in early trading Thursday. The CBOE Volatility Index, widely considered a fear gauge for the market, rose to 24.1 points on Thursday morning, a fresh six-month high.

But Hogan said earnings were also a source of worry because they could showcase the consequences of Trump's trade wars for United States companies, from raising costs of raw materials to forcing enterprises to change supply chains.

Intel fell 2.6 percent and Nvidia 4.4 percent.

The Dow Jones Industrial Average lost 101 points, or 0.4 percent, to 25,497.

The S&P index recorded 10 new 52-week highs and 28 new lows, while the Nasdaq recorded six new highs and 90 new lows.

Japan's benchmark fell by an unusually wide margin of 3.9 percent and China's main index lost 4.3 percent.

But a recent International Monetary Fund warning on global growth taking a hit from trade disputes has hit confidence in the stock market, as has US Treasury yields at more than 7-year highs, signalling a tightening of capital globally.

Other reports by MaliBehiribAe

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