Stocks plunge again on wide sell­ing; Dow drops an­other 545

Cecil Whig - - REGIONAL & NATIONAL - By MAR­LEY JAY AP Mar­kets Writer AP Busi­ness Writ­ers Alex Veiga in Los An­ge­les, Annabelle Liang in Sin­ga­pore and Joe McDon­ald in Bei­jing con­trib­uted to this re­port.

— 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 two-day loss of 5.3 per­cent is the big­gest for 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 ul­tra-low 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 and CVS lead a rout in health care stocks. 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 larger-than-nor­mal num­ber of com­pa­nies have warned that their third-quar­ter 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 steep­est down­turn since a 10-per­cent 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 smaller-com­pany stocks fell 30.03 points, or 1.9 per­cent, to 1,545.38.

Thurs­day’s losses in the U.S. fol­lowed steep de­clines over­seas. France’s CAC 40 and the Bri­tish FTSE 100 both sank 1.9 per­cent and the DAX in Ger­many lost 1.5 per­cent. Tokyo’s Nikkei 225 gave up 3.9 per­cent and Hong Kong’s Hang Seng in­dex shed 3.5 per­cent. The Kospi in South Korea fell 4.4 per­cent.

“Peo­ple are try­ing to get a sense of ‘where should my money ac­tu­ally be right now?’” said JJ Ki­na­han, chief mar­ket strate­gist TD Amer­i­trade.

The S&P 500’s cur­rent de­cline is the long­est since a nine-day 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.

The mar­ket had been calm from late June through Septem­ber as in­vestors were sat­is­fied with con­tin­ued eco­nomic growth, strong com­pany prof­its, and signs of progress in trade talks be­tween the U.S. and sev­eral part­ners, al­though the U.S. re­mained at odds with China.

Del­wiche, the Baird strate­gist, thinks the cur­rent slump isn’t over yet.

“I don’t see ev­i­dence right now that this is a one-off event,” he said.

On Thurs­day, Pres­i­dent Trump re­newed his crit­i­cism of the Fed­eral Re­serve, blam­ing the re­cent down­turn in the stock mar­ket on the Fed’s rate pol­icy.

“We have in­ter­est rates go­ing up at a clip that’s much faster than cer­tainly a lot of peo­ple, in­clud­ing my­self, would have an­tic­i­pated. I think the Fed is out of con­trol,” the pres­i­dent said to re­porters in the Oval Of­fice.

Trump said he had no in­ten­tion of fir­ing Jerome Pow­ell, who he ap­pointed as Fed chair­man in Fe­bru­ary.

Bond prices rose as the re­cent surge in yields at­tracted the at­ten­tion of some in­vestors. The yield on the 10-year Trea­sury note fell to 3.15 per­cent from 3.22 per­cent late Wed­nes­day. That’s still sharply higher than it was about a week ago, and ear­lier this week the yield on the 10-year note reached its high­est level since mid-2011.

The drop in yields hurt banks, and JPMor­gan Chase fell 3 per­cent to $1078.13 while Bank of Amer­ica sank 3 per­cent to for $28.36. JPMor­gan Chase and sev­eral other banks will re­port their third-quar­ter re­sults Fri­day morn­ing.

Tech­nol­ogy and re­tail com­pa­nies con­tin­ued to stum­ble. Ama­zon dropped an­other 2 per­cent to $1,719.36 and Ap­ple fell 0.9 per­cent to $214.45. Mi­crosoft and Al­pha­bet, Google’s par­ent com­pany, were lit­tle changed. Those stocks have made huge gains for years, but they’re cur­rently out of fa­vor. Ama­zon and Al­pha­bet, re­spec­tively the sec­ond- and fourth-most valu­able U.S. com­pa­nies, are in what’s known as a “cor­rec­tion,” a drop of more than 10 per­cent from a re­cent peak. Face­book, the sixth-largest com­pany, has tum­bled 29 per­cent since late July, sur­pass­ing the 20-per­cent thresh­old for a “bear mar­ket.”

The Nas­daq com­pos­ite has fallen 9.6 per­cent since it set a record high in late Au­gust and the Rus­sell 2000 has fallen 11 per­cent.

U.S. crude dropped 3 per­cent to $70.97 a bar­rel in New York. Brent crude, the in­ter­na­tional stan­dard, dropped 3.4 per­cent to $80.26 a bar­rel in Lon­don. Af­ter months of de­clines, the price of gold jumped by the most in two years, ris­ing 2.9 per­cent to $1,227.60 an ounce.

Whole­sale gaso­line lost 4.3 per­cent to $1.93 a gal­lon. Heat­ing oil shed 2.6 per­cent to $2.33 a gal­lon. Nat­u­ral gas fell 1.9 per­cent to $3.22 per 1,000 cu­bic feet.

In other met­als trad­ing, sil­ver rose 2 per­cent to $14.61 an ounce and cop­per added 0.8 per­cent to $2.80 a pound.

The dol­lar fell to 111.94 yen from 112.59 yen, and the euro rose to $1.1594 from $1.1525. Mon­day shows Jeal­ous talk­ing about re­mov­ing Ho­gan from the White House, be­com­ing Vir­ginia’s next gov­er­nor and mak­ing his­tory as the first black pres­i­dent. Ho­gan’s cam­paign tweeted the video, ask­ing “What ex­actly is @BenJeal­ous run­ning for?”

Jeal­ous said at a news con­fer­ence Tues­day the video en­cour­ages bul­ly­ing young peo­ple “and that’s not OK.” He ex­plained that em­ploy­ing a word re­place­ment strat­egy to cope with a stut­ter “goes right most of the time, but not all the time.”

Ho­gan’s cam­paign re­sponded in a state­ment that “Jeal­ous can’t sim­ply dis­own his words ev­ery time he gets in trou­ble with vot­ers.”

Po­lice: Teen run­ning for school bus fa­tally hit by SUV


— Po­lice say a 16-year-old boy was hit by an SUV as he ran to catch the school bus in Mary­land.

State po­lice said in a state­ment that Kyle Ly­nam was hit by a Chevy Ta­hoe in the White Hall area of Har­ford County on Tues­day morn­ing.

Po­lice say Ly­nam was run­ning south on the north­bound shoul­der, try­ing to catch a school bus when he was hit. Po­lice say the bus had its yel­low lights ac­ti­vated, but it hadn’t yet de­ployed a stop sign with red flash­ing lights that sig­nals that traf­fic in both direc­tions should stop.


Res­cue per­son­nel search amidst de­bris in the af­ter­math of Hur­ri­cane Michael in Mex­ico Beach, Fla., Thurs­day, Oct. 11, 2018.

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