Stocks plunge again as Dow drops 546 points

Orlando Sentinel - - FRONT PAGE - By Mar­ley Jay

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.

The Dow Jones In­dus­trial Aver­age dropped 546 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 had de­clined for six straight days. The sell­ing 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.

Seek­ing safety, in­vestors bought gold and gov­ern­ment bonds. That pushed prices up and yields down, end­ing a surge in yields that had touched off the mar­ket’s cur­rent de­cline. But in­vestors found more things to worry about.

“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.” Pres­i­dent Don­ald Trump to re­porters in the Oval Of­fice.

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-thannor­mal 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 fell 3.3 per­cent Wed­nes­day and 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 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.

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

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.

The Fed­eral Re­serve re­cently sig­naled its con­fi­dence in the econ­omy by rais­ing a key in­ter­est rate for a third time this year, fore­cast­ing an­other rate hike be­fore year’s end.

Long-term U.S. mort­gage rates leaped this week to their high­est lev­els in seven years.

Mort­gage buyer Fred­die Mac said Thurs­day the rate on 30-year, fixed-rate mort­gages jumped to an aver­age 4.90 per­cent this week from 4.71 per­cent last week. That’s the high­est level for the bench­mark rate since April 2011. A year ago, it stood at 3.91 per­cent.

The aver­age rate on 15-year, fixed-rate loans rose to 4.29 per­cent this week from 4.15 per­cent last week.

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.


Spe­cial­ist John O’Hara works the floor of the New York Stock Ex­change. The Dow slumped again Thurs­day.

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