Publicado: Vie, Octubre 12, 2018
Financiera | Por Marilu Caballero

Dow Falls 1300 Points In 48 Hours As Market Rout Continues (DJIA)(SPX)

Dow Falls 1300 Points In 48 Hours As Market Rout Continues (DJIA)(SPX)

The Dow Jones Industrial Average fell 430 points Wednesday morning, or around 1.6 percent.

Tech stocks declined due to rising bond yields, which followed a spike in rates for the benchmark USA 10-Year Treasury.

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 S&P 500 was also down 3% while the tech-heavy Nasdaq (Frankfurt: 813516 - news) lost 4%.

The 10-year Treasury yield rose to 3.22 per cent from 3.20 per cent late Tuesday after earlier touching 3.24 per cent. Nasdaq composite, which has a high concentration of technology stocks, tumbled 244 points, or 3.2 per cent, to 7,495.

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

Major equity indexes in Europe fell more than 1.0 percent, also pulled down by technology shares, and gold prices inched up as some investors sought refuge in the metal. There have recently been several indications that the USA housing market has cooled, likely in part due to higher rates on mortgages.

"The S&P 500 is looking very weak and negative and that is putting fear into investors", said Michael Matousek, head trader at U.S. Global Investors.

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The recent turbulence in financial markets is a contrast to what investors have grown accustomed to in a bull market that has lasted more than 10 years, the longest in history.

The decline came amid a widespread selloff on Wall Street, which spilled over into global markets overnight as investors reacted to the "sheer magnitude of the move", OANDA analyst Stephen Innes wrote in a note to investors. It's fallen 6.3 per cent over the last five days.

Sears Holdings plunged 33.3 percent.

In theory, banks should do better if the Fed keeps raising interest rates and bond yields climb higher since it will make their loans more profitable.

"When we have a recalibration in values, it's not surprising that it takes more than one day", said Art Hogan, chief market strategist at B. Riley FBR.

The pullback - particularly for tech stocks - is needed, argued Joe Heider, president of Cirrus Wealth Management. USA gold futures settled up $1.9, or 0.16 percent, at $1,193.4. Silver dipped 0.5 per cent to $14.33 an ounce.

All 11 sectors in the S&P 500 are lower, with banks and energy stocks the hardest hit.

The dollar index fell 0.31 per cent, with the euro up 0.4 per cent to $1.1564. The Russell 2000 index of smaller-company stocks fell 30.03 points, or 1.9 percent, to 1,545.38. The Japanese yen strengthened 0.53 percent versus the greenback at 112.36.

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