Market turbulence continues in new year
NEW YORK — The rollercoaster ride on Wall Street resumed on Wednesday, the first trading day of the new year, as stocks plunged early on, then slowly recovered and finished with a slight gain.
The Dow Jones industrial average dropped as much as 398 points in the first few minutes of trading after more shaky economic news from China. But it gradually recouped those losses, and a small rally over the last 15 minutes of trading left major indexes a bit higher than where they started.
A Chinese government survey and one by a major business magazine showed manufacturing in China weakened in December as global and domestic demand cooled. That weighed on big exporters, with tech companies like Microsoft and industrials like Boeing taking sharp losses early on, only to bounce back.
That kind of whiplash was typical during the last three months of 2018, and many strategists think it is likely to continue.
After trading ended, Apple gave a quarterly sales forecast that was far worse than analysts expected. It said its revenue will be lower than previously believed because of China's slowing economy. In aftermarket trading, Apple fell 7 percent. Other tech companies, especially chipmakers, sank, as well.
Some of last year's worst performers, including energy and internet companies, led the gains Wednesday.
After gliding gently higher for years, propelled by rising corporate profits and extremely low interest rates from the Federal Reserve, stocks have been heaving up and down in recent months as a host of fears weigh on investors, including threats to global economic growth.
Stocks are coming off their worst year in a decade, and many Americans could be in for a shock when they open their monthly and endof-the-year 401(k) statements.
The benchmark S&P 500 fell 6 percent in 2018, its first substantial loss since 2008, and dropped 14 percent since late September. Many other stock indexes around the world fared even worse last year.
The U.S. economy has been expanding for almost a decade, and stocks have risen steadily over that time. From September through the end of December, however, investors became more and more worried that challenges such as U.S.-China trade tensions, rising interest rates and political uncertainty could slow the economy and company profits, and possibly tip the U.S. economy and the global one into a recession.