Sign up USA
Proactive Investors - Run By Investors For Investors
Markets

Dow Jones rings up 800-point loss in rout as rising yields and inflation worries hammer stocks

Monster Hurricane Michael has the potential to cause $16 billion in damage
1539191036_shutterstock_258183602.jpg
Market sentiment has also been unnerved by rising government bond yields

The Dow Jones rang up one of the biggest one-day losses in its history as worries over rising US treasury yields mauled equities. 

The Dow Jones Industrial Average index was down 831 points or by 3.14% to finish around 25,599.

It was the third biggest one-day fall in the history of the Dow, according to exchange records.

The biggest one-day fall for the Dow took place on February 5, 2018, when it plunged 1,175 points or by 4.6% to 24,345. During that session, the Dow was down 1,600 points.

The second largest one-day decline was on February 2, 2018, when the index dropped 1,032 or 4.15% to 23,860.

The yield on the 10-year Treasury note is coming in at about 3.23%, having touched a top that has not been seen in seven years on Tuesday.

Aside from rising yields, the trade is also nervously watching the impact of Hurricane Michael, which is estimated causing up to $16 billion in damages when it hits states ranging from Florida and on up to Virginia.

When hurricane Florence struck the Carolinas last month, it caused job creation to come in lower-than-expected in September.

The weakness was kicked off by Italy’s fiscal watchdog casting doubt on the strength of an economic growth projection of 1.5% being forecast for next year by the country’s governing coalition.

The contagion In Italy and Europe then spread to the United States.

The tech-laden Nasdaq  also took it on the chin, falling 315 points to settle at 7,422.

Like the Dow, it was the third biggest single-day loss for the exchange in history.

The S&P 500 declined 94 points to close at 2,785. 

The Russell 2000 index of small-cap stocks dropped 45 points to conclude at 1,576.

In Canada, Toronto’s TSX sank by 311 points or by almost 2% to trade around 15,542, likewise undermined by fears over global growth.

1:03 pm: US stocks stumble as inflation pressures intensify and worries about Italy's budget problems mount

US stocks suffered from a rout by midsession on Wednesday as investors fretted about rising US treasury yields and fears over Italy's budget depressing global growth.

Italy’s fiscal watchdog cast doubt on the strength of an economic growth projection of 1.5% being forecast for next year by the country’s governing coalition.

The contagion from that report spread from Europe to the United States, where market players are already worried about escalating yields on treasury notes.

The yield on the 10-year Treasury note is coming in at about 3.23%, having touched a top that has not been seen in seven years on Tuesday.

The Dow Jones Industrial Average index was down 350 points to trade around 26,079 by midday.

They were held back in the morning session by blue chips Microsoft, Visa, Boeing, and Apple among others. 

The S&P 500 was on course for a fifth day of losses and dropped 1.41% to 2,839. 

The tech-laden Nasdaq posted sharper losses as it slid more than 2% to 7,576. 

The Russell 2000 index of small-cap stocks also shed 1.05% to 1,604. 

In Canada, Toronto’s TSX sank by 232 points or by 1.47% to 15,621, likewise deflated by concerns about global growth.

10:00 AM: US stocks open lower as inflationary pressures intensify and concerns about Italy's budget problems mount

US stocks slid at the open Wednesday as investors responded to concerns about Italy's budget and expectations about higher interest rates.

A contagion effect hit the US from Europe, where markets were trading lower after Italy’s fiscal watchdog cast doubt on the strength of an economic growth projection of 1.5% being forecast for next year by the country’s governing coalition. Slower growth suggests Italy's budget deficit will be bigger than the government is predicting. 

Market sentiment has also been unnerved by rising government bond yields, given that the yield on 10-year Treasury notes is coming in at about 3.23% after reaching a peak not seen in seven years on Tuesday.

Early in the session, the Dow Jones Industrial Average index traded 155 points lower at 26,273, held back by Nike, Intel, Microsoft, Visa, Boeing, Apple and Caterpillar.

The S&P 500, meanwhile, was on course for a fifth day of losses and shed 24 points to 2,855, pushed down by Tiffany & Co, Estee Lauder Companies, Autodesk, TransDigm Group, Tripadvisor and Qorvo Inc.

Elsewhere, the tech-laden Nasdaq also turned down dramatically, losing 133 points to 7,605, dragged back by Align Technology, ASML Holding, Tesla, Autodesk and the chip maker NVIDIA Corp.

Up in Canada, Toronto’s TSX fell by 114 points to 15,739, dragged back by concerns about global growth while the Russell 2000 index of small-cap stocks stayed relatively flat, losing five points to hover at 1,616.

7:11AM: US stocks set to head north despite European equity weakness; SoftBank in focus

US stocks are seen starting marginally higher midweek after a mixed close yesterday as trade tensions continue and UK GDP data disappointed.

Wall Street has been on a general roll of late and the Dow Jones Industrial Index futures are up 19 points, while Nasdaq futures are trading 7.56 points ahead. The broader based S&P 500 index is up 1.75.

Stocks closed mixed yesterday due to worry over global growth and interest rates in the US.

Yields on the 10-year Treasury note clawed its way to its highest level since 2011 last week.

The  Dow Jones closed  down around 56 at 26,430, while the S&P 500 finished down just over four points at 2,880.

The Nasdaq closed up around two points at 7,738. In Toronto, the TSX closed over 92 points lower at 15,854.

The big corporate story doing the rounds today concerns Japan's SoftBank Group Corp (TYO: SFTBF), which is in talks over a massive transaction, which will see it acquire a majority stake in WeWork.

The potential investment, which would likely come from SoftBank's Vision Fund, could reportedly reach $20 billion.

In Europe, the FTSE 100 is down 3.42 at 7,234, while the German DAX is down around 53 points at 11,923.

In the UK, August’s GDP (gross domestic product) reading came in flat, but July’s growth figure revised higher from to 0.4% form 0.3%, while the manufacturing production figure remained unexpectedly unchanged at -0.2.

In Asia overnight, the Nikkei 225 added around 39 points at 23,506. The  Asia Dow lost almost two points at 3,342.


No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright © Proactiveinvestors.com, 2018. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use