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Saturday 17

November, 2018 1:01 AM



US stocks plunge, sending Dow into the red for 2018

US stocks plunge, sending Dow into the red for 2018

US stocks finished a punishing session sharply lower Wednesday, with major indices sinking more than two percent and the Dow and S&P 500 tumbling and wiping out all the 2018 gains.

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25.10.2018 07:57 AM

US stocks finished a punishing session sharply lower Wednesday, with major indices sinking more than two percent and the Dow and S&P 500 tumbling and wiping out all the 2018 gains.

The Dow Jones Industrial Average lost 2.4 percent to close at 24,583.42, a single day loss of more than 600 points.

The tech-rich Nasdaq Composite Index plummeted 4.4 percent to finish at 7,108.40, posting its worst day since 2011, while the broad-based S&P 500 sank 3.1 percent to 2,656.15.

The losses followed a mixed day of corporate earnings that analysts fear signal the economy is exiting the "peak" earnings environment helped by US tax cuts that were enacted late last year.

Investors also have been unnerved by comments from industrial companies saying trade conflicts have raised material costs.

"Costs are increasing and it's often tariff-related. We also reached a potential peak for earnings," said Nate Thooft, senior managing director at Manulife Mutual Funds.

"Companies that show marginal weakness take a beating."

The share price declines also came after data on US home sales fell to their slowest pace in nearly two years, and a Federal Reserve report showed firms nationwide are worried about the rising hit from tariffs and widespread labor shortages.

The expectation the Fed will continue to raise interest rates also has buffeted stocks this month, alongside anxiety over the fallout from the murder of Saudi Arabian journalist Jamal Khashoggi and an ongoing budget dispute between Italy and Brussels.

Technology shares were especially hard hit Wednesday, with Amazon losing 5.9 percent, Facebook 5.4 percent, Google-parent Alphabet 4.8 percent and Netflix 9.4 percent.

Chip companies also sank following a disappointing forecast from Texas Instruments, which dropped 8.2 percent. Applied Materials lost 5.1 percent, Micron 8.4 percent and Advanced Micro Devices 9.2 percent.

A rare bright spot was Boeing, which advanced 1.3 percent after raising its full-year profit forecast.

But other large industrial companies in the Dow fell, including Caterpillar and 3M which dropped 5.6 percent and 4.2 percent, respectively. The two companies also fell sharply on Tuesday following disappointing results.
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