The Bull

Monday 18

February, 2019 5:06 AM



Wall St drops, S&P confirms correction

Wall St drops, S&P confirms correction

The Dow and Nasdaq have posted their the biggest weekly drops since March and the S&P closed 10 per cent down from its September 20 high in light trading.

Share |

By AAP 26.11.2018 07:00 AM

US stocks have closed lower in a shortened post-holiday trading session as the energy sector tumbled on continued weakness in oil prices, and the benchmark S&P 500 confirmed its second correction of 2018.

The three major US indexes all fell well over 3 per cent for the week, with the Dow industrials and the Nasdaq posting their biggest weekly percentage declines since March.

The S&P 500 ended about 10.2 per cent down from its September 20 closing record high, confirming it had entered a correction.

The S&P last entered a correction earlier this year after posting a then record high in late January, and falling more than 10 per cent by early February. That correction lasted roughly seven months, until the index posted a fresh record high in late August.

On Friday, the S&P 500 energy sector fell 3.3 per cent, dragged down by another plunge in oil prices, amid fears of a supply glut even as major producers consider cutting output. Oil prices have plunged some 30 per cent since the start of October.

Shares of oil majors Chevron and Exxon Mobil dropped 3.4 per cent and 2.7 per cent, respectively.

Aside from energy, declines in Apple and Amazon weighed on the S&P 500, underscoring the drop in technology and internet stocks that has marked this latest swoon in equities.

"I see this as a continuation of the market trying to come to terms with slower growth next year," said Alicia Levine, chief market strategist at BNY Mellon Investment Management in New York. "Today's price action is part of that story."

The Dow Jones Industrial Average fell 178.74 points, or 0.73 per cent, to 24,285.95, the S&P 500 lost 17.37 points, or 0.66 per cent, to 2,632.56 and the Nasdaq Composite dropped 33.27 points, or 0.48 per cent, to 6,938.98.

Trading volume was relatively light with the session ending at 1pm local time on Friday following the Thanksgiving Day holiday, so the day's action might carry less significance.

Volume on US exchanges was about 3.4 billion shares, well below the 8.2 billion average for the full session over the last 20 trading days.

"When everyone comes back, we'll get a clearer indication of what it might look like for the rest of the year," said John Carey, managing director and portfolio manager at Amundi Pioneer Asset Management in Boston.

"Today just confirms the recent weakness due to persisting worries about the economy and the effect of higher interest rates on price-to-earnings multiples, borrowing costs and so forth."

US shoppers formed long lines at store checkout counters on Black Friday to snap up deep discounts on clothing and electronics, offering evidence of stronger consumer spending at the start of retailers' make-or-break holiday season.

The S&P 500 retailing index fell 0.6 per cent.

United Technologies rose 2.6 per cent after the company won Chinese regulatory approval to buy aircraft parts maker Rockwell Collins. Rockwell shares jumped 9.2 per cent.

Investors will be focusing on next week's G20 summit in Buenos Aires, where US President Donald Trump and his Chinese counterpart Xi Jinping are expected to hold talks amid a trade dispute that has weighed on financial markets.

Declining issues outnumbered advancing ones on the NYSE by a 1.36-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favoured advancers.

The S&P 500 posted 1 new 52-week highs and 19 new lows; the Nasdaq Composite recorded 15 new highs and 74 new lows.

Archive
  • Trump to get update on China trade talks

    US duties on $US200 billion worth of Chinese imports are set to rise to 25 per cent from 10 per cent if no deal is reached by March 1 to address US demands

  • SA govt unveils Repat Hospital plan

    The South Australian government has unveiled its master plan to redevelop Adelaide's Repatriation Hospital.

  • US-China talks to boost Aussie market

    Australia's share market is tipped to open higher on Monday after optimism surrounding US and China trade talks.

  • The Week Ahead

    In Australia, the December quarter Wage Price Index release dominates the local agenda in the coming week.

  • ASX closes flat as more companies report

    The Australian sharemarket has managed to finish in positive territory as more companies reported earnings results.

  • Stocks to watch

    Stocks of interest at the close of trade on the ASX on Thursday, February 14.

  • Germany to let NATO use its cyber skills

    Germany is to join the ranks of NATO countries making its cyber warfare skills available to the alliance to help fight hacking and electronic warfare, officials said on Thursday.

  • Domain posts $156.4m loss as listings fall

    Domain's first-half loss has widened to $156.4 million after Sydney and Melbourne's stumbling property markets forced it to take a large non-cash impairment.

  • Farmer denies scaring vegans with gunshot

    A WA farmer who asked vegans to stop filming calves on his property and leave, then fired a shot into farmland, says he wasn't trying to scare them.

  • CommSec Daily Report Friday

    The local sharemarket is mostly flat so far in a choppy session of trade. The ASX 200 is marginally higher by 6 points or 0.1% to 6066 points towards lunch after trading in a narrow 18 point band...

Markets
Index: Points Change Percent

PLEASE SUPPORT OUR SPONSORS, AUSTRALIA'S LEADING BROKERS:



© Copyright TheBull.com.au. All rights reserved.