Wall St. sell-off continues its slide
Dow drops 545 points, Nasdaq skids 1.3%, nears correction point
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.
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.