Stocks plunge again as Dow drops 546 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.
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.