Stocks plunge again; Dow’s twoday loss tops 1,350 points
NEW YORK» U.S. stocks sank more than 2 percent Thursday, the second day of steep declines around the globe driven by concerns about rising interest rates and trade tensions that could slow economic growth.
The Dow Jones industrial average fell 545 points after dropping 831 points Wednesday. The twoday loss of 5.3 percent is the biggest for the Dow since February. The S&P 500 is also down more than 5 percent over the two days, and after falling for the past six trading days is almost 7 percent below its Sept. 20 high.
The recent turbulence in financial markets is a contrast to what investors have grown accustomed to in a bull market that has lasted more than 10 years, the longest in history. A hallmark of the past decade has been ultralow interest rates, which the Federal Reserve used to promote growth in the aftermath of the 2008 financial crisis.
The Fed has been gradually raising interest rates over the past two years, after not having increased them since the recession. Those higher rates have been the catalyst for recent selling, stoking concerns that slower growth would impinge on corporate profits.
The selling Thursday was widespread. Energy companies sank along with oil prices. Technology companies and retailers — including longtime market favorites Apple, Alphabet and Amazon — extended their recent slide.
“There isn’t much of a place to hide right now in the equity market,” said Willie Delwiche, an investment strategist at Baird.
Seeking safety, investors bought gold and government bonds. That pushed bond prices up and their yields down, ending a surge in yields that had touched off the market’s current decline. But investors found more things to worry about.
There are ongoing concerns about the unresolved trade dispute between the U.S. and China. Strong earnings reports in the coming weeks could soothe investor nerves, but negative comments from company executives about future profits could have the opposite effect. Recently a largerthannormal number of companies have warned that their thirdquarter results could be weaker than analysts expected.
The benchmark S&P 500 index rose in morning trading, but ultimately gave up 57.31 points, or 2.1 percent, to 2,728.37, its lowest close in three months. The index has declined 6.7 percent during its current losing streak. That’s its steep est downturn since a 10percent drop in early February.
The Dow Jones industrial average lost 545.91 points, or 2.1 percent, to 25,052.83 after falling as much as 698. The Nasdaq composite skidded 92.99 points, or 1.3 percent, to 7,329.06. The Russell 2000 index of smallercompany stocks fell 30.03 points, or 1.9 percent, to 1,545.38.
Thursday’s losses in the U.S. followed steep declines overseas. Markets in France, Britain and Germany fell after stocks declined sharply in Hong Kong and Japan.
“People are trying to get a sense of, ‘Where should my money be right now?’ ” said JJ Kinahan, a market strategist for TD Ameritrade.
The S&P 500’s current decline is the longest since a nineday skid shortly before the 2016 presidential election. It has climbed 27.5 percent since Donald Trump was elected, and is still up 2.1 percent in 2018.