Fed re­port helps U.S. stocks claw back af­ter early 700-point plunge

The Denver Post - - BUSINESS - By Alex Veiga

U.S. stocks clawed most of their way back from a deep slide Thurs­day that at one point had wiped out the mar­ket’s gains for the year.

An early plunge briefly knocked more than 700 points off the Dow Jones in­dus­trial av­er­age as the ar­rest of a se­nior Chi­nese tech­nol­ogy ex­ec­u­tive threat­ened to cause an­other flare-up in ten­sion be­tween Wash­ing­ton and Bei­jing.

The sell-off eased by late af­ter­noon, how­ever, af­ter The Wall Street Jour­nal re­ported that the Fed­eral Re­serve is con­sid­er­ing break­ing with its cur­rent ap­proach of steady in­ter­est rate hikes, fa­vor­ing a wait-and-see ap­proach. That was a re­lief to in­vestors wor­ried that the Fed might raise in­ter­est rates too fast, which could choke off eco­nomic growth.

“The Fed is try­ing to, in essence, come out and make it clear they are not on a rigid sched­ule of rate hikes next year,” said Quincy Krosby, chief mar­ket strate­gist at Pru­den­tial Fi­nan­cial.

The S&P 500 in­dex fell 4.11 points, or 0.2 per­cent, to 2,695.95. The bench­mark in­dex had been down as much as 2.9 per­cent.

The Dow dropped 79.40 points, or 0.3 per­cent, to 24,947.67. The av­er­age briefly slumped as much as 784 points.

The tech­nol­ogy-heavy Nas­daq com­pos­ite re­versed an early loss to fin­ish with a gain, ad­ding 29.83 points, or 0.4 per­cent, to 7,188.26.

The Rus­sell 2000 in­dex of small­com­pany stocks gave up 3.34 points, or 0.2 per­cent, to 1,477.41.

Traders con­tin­ued to shovel money into bonds, a sig­nal that they see weak­ness in the econ­omy ahead. The yield on the 10-year Trea­sury note fell to 2.87 per­cent from 2.92 per­cent on Tues­day.

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