Wall St. sell-off con­tin­ues its slide

Dow drops 545 points, Nas­daq skids 1.3%, nears cor­rec­tion point

China Daily (USA) - - FRONT PAGE - By CHINA DAILY

US stocks fell for the sec­ond con­sec­u­tive day on Thurs­day, and in­dexes in Europe and Asia also skid­ded as in­vestors wor­ried that higher in­ter­est rates will hurt com­pany earn­ings and the US-China trade ten­sions will slow global busi­ness.

The Dow Jones in­dus­trial av­er­age dropped about 545 points, or 2.1 per­cent, at 25,052. The Nas­daq com­pos­ite slid about 1.3 per­cent, a day af­ter the tech-heavy in­dex had its big­gest per­cent­age drop since June 2016.

The in­dex briefly turned pos­i­tive dur­ing morn­ing trad­ing be­fore giv­ing in to heavy selling pres­sure. In­vestors un­loaded US stocks in af­ter­noon trad­ing, with sell or­ders briefly hit­ting the high­est lev­els since a liq­uid­ity-driven sell­off in May 2010, ac­cord­ing to Bloomberg.

At one point the Dow was down 699 points. The Dow has shed 1,378 points over the past two days.

The de­clines on Thurs­day pushed the Dow’s two-day losses to more than 1,300 points and sent the Nas­daq into cor­rec­tion ter­ri­tory.

In Asia, Tokyo’s Nikkei 225 de­clined 3.9 per­cent, and the Shang­hai Com­pos­ite in­dex sank 5.2 per­cent. Europe’s ma­jor stock in­dexes fell less dras­ti­cally, by about 1.5 per­cent.

Oil prices slumped to more than two-week lows on in­vestor sen­ti­ment made more bear­ish by a big­ger-than-ex­pected build in crude oil in­ven­to­ries, Reuters re­ported.

“The sig­nif­i­cant in­crease in crude oil in­ven­to­ries is a re­flec­tion of re­finer­ies go­ing down for main­te­nance,” An­drew Lipow, pres­i­dent of Lipow Oil As­so­ci­ates, told Reuters.

Chris­tine La­garde, man­ag­ing di­rec­tor of the In­ter­na­tional Mone­tary Fund, warned on Thurs­day that if the ten­sions be­tween the United States and China con­tin­ued to es­ca­late, “the global econ­omy would take a sig­nif­i­cant hit.”

“Our strong rec­om­men­da­tion,” she said at a meet­ing in Bali, “is to de-es­ca­late those ten­sions and to work to­ward a global trade sys­tem that is stronger, that is fairer, and that is fit for pur­pose and fit for the fu­ture.”

US Pres­i­dent Don­ald Trump crit­i­cized the US Fed­eral Re­serve for a third straight day, call­ing the cen­tral bank “cute” for its re­cent in­ter­est-rate hikes. That fol­lowed com­ments at a Wednesday even­ing cam­paign rally in which Trump called the cen­tral bank “crazy” for its cur­rent in­ter­est rate pol­icy.

The Fed has in­creased rates three times in 2018 and is ex­pected to lift bench­mark rates a fourth time in De­cem­ber, as well as con­tinue its grad­ual tight­en­ing trend in 2019.

The stock mar­ket sell-off is caus­ing Tencent Mu­sic En­ter­tain­ment Group to post­pone its highly an­tic­i­pated IPO, The Wall Street Jour­nal re­ported Thurs­day, cit­ing peo­ple fa­mil­iar with the deal.

Ac­cord­ing to a prospec­tus filed ear­lier this month, Tencent Mu­sic plans on rais­ing as much as $1 bil­lion in what could be the largest US IPO by a Chi­nese com­pany since Alibaba raised over $20 bil­lion in 2014.

PHO­TOS BY REUTERS, AFLO AND DORIS CHAN FOR CHINA DAILY

A stock mar­ket panic that started on Wall Street (top left) swept through Asia on Thurs­day, knock­ing down in­dexes in Ja­pan (top right) and Hong Kong (bot­tom left), and saw China’s bench­mark Shang­hai Com­pos­ite In­dex (bot­tom right) hit a near three-year low.

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