Stocks plunge again; Dow down 1,300


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 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, the world's se­cond-big­gest econ­omy.

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 larg­erthan-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. 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 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 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, even as the U.S. re­mained at odds with China.


Spe­cial­ists Jay Woods, right, and Thomas Mcar­dle work on the floor of the New York Stock Ex­change, Thurs­day, Oct. 11.

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