Published: Thu, October 11, 2018
Economy | By

Dow sinks 800 as tech companies decline

Dow sinks 800 as tech companies decline

The benchmark S&P 500 and the Dow Jones Industrial Average fell almost 1.5 percent and at the day's low had retreated 3.7 percent and 3.6 percent, respectively, from their all-time highs.

In Canada, the S&P/TSX composite index was down 238.87 points or 1.51 per cent, to 15,615.18.

The Dow fell more than 800 points and dipped below 26,000 for the first time in a month.

The broad-based S&P 500 slumped 3.3 percent to end at 2,786.46, while the tech-rich Nasdaq Composite Index plummeted 4.0 percent to finish the session at 7,427.74. That decline came after the Dow's largest single-day drop in history, when it fell 1,175 points earlier that month.

Shares in Facebook, Amazon, Apple, Netflix and Google's parent company Alphabet - the so-called "FAANG" stocks that have driven U.S. markets to all-time highs recently - all fell in NY trading.

The technology-heavy Nasdaq composite dropped 4.1% to 7,422 points, its biggest loss since February 8.

Wall Street was hammered on Wednesday as investors dumped high-growth names such as technology and FAANG stocks, with rising Treasury yields and trade-related worries sapping their risk appetite.

The 10-year Treasury yield remained at 3.20 percent, about where it was late Tuesday, after earlier touching 3.24 percent. Tiffany plunged 10.2 per cent to US$110.38 and Ralph Lauren fell 8.4 per cent to US$116.96. The stock fell 35.7 percent to 38 cents in morning trading.


Rising costs, as inflation and borrowing rates pick up, could also be a worry for stock markets.

Benchmark U.S. crude oil fell 2.4 per cent to $73.17 a barrel in NY. Intel dipped 3.76 percent today but that might be viewed lightly when you look at team Red and team Green's day on the market.

Although the losses were widespread, stocks that have been the biggest winners on the market, including technology companies and retailers, suffered steep declines. Brent crude, the global standard, lost 2.2 per cent to $83.09 a barrel in London.

Wholesale gasoline shed 2.7 per cent to $2.02 a gallon.

South Korea's Kospi dropped 1.1 per cent, the CAC 40 in France dropped 2.1 per cent, Germany's DAX lost 2.2 per cent and the FTSE 100 in London fell 1.3 per cent. There have recently been several indications that the USA housing market has cooled, likely in part due to higher rates on mortgages.

Gina Martin Adams, the chief equity strategist for Bloomberg Intelligence, said investors were concerned about the big increase in yields, which makes it more expensive to borrow money.

Shares in the USA energy sectors were hit hard as investors reacted to shutdowns sparked by Hurricane Michael in Florida and the Gulf of Mexico. Investors see many of these countries as being vulnerable to higher U.S. interest rates, which can pull away investment dollars. Brazil's Bovespa lost 2.5 per cent and the Merval in Argentina sank 2.2 per cent.

The Australian dollar slipped against major currencies, down to 70.7 U.S. cents, 53.6 British pence, 61.4 Euro cents and 79.5 Japanese yen. The British pound rose to $1.3197 from $1.3146.

Like this: