Dow Jones Industrials Sink 800-plus Points

US stock indexes keep falling as rates resume their climb

The Dow Jones industrial average gave up 738 points, or 2.8 per cent, to 25,686.

Technology stocks, the biggest winners in the market over the past year, took some of the worst losses.

But there were few places to hide Wednesday. Investors see many of these countries as being vulnerable to higher USA interest rates, which can pull away investment dollars.

Although that's largely because the United States economy is so strong, the spike in rates for the benchmark USA 10-Year Treasury has investors wondering if the near-decade-old bull market may finally be ending. "This orphan status that equity markets have enjoyed for the last 10 years is disappearing and finally getting some competition from the bond market".

So bond yields, the return an investor realizes by owning a bond, move in the opposite direction of prices.

The markets have been on a historic climb - with the Dow and S&P each notching dozens of new highs since 2016 - buoyed by a strong United States economy and solid corporate earnings.

"We're seeing cracks in the armour [and] to me it's not why that happened", he said. "This is a bull market correction".

The benchmark S&P 500 and the Dow Jones Industrial Average fell almost 1.5 percent and at the day's low had retreated 3.7 percent and 3.6 percent, respectively, from their all-time highs.

The Dow's point decline was the worst since February, when the index fell by more than 1,000 - twice.

The S&P 500 index hasn't suffered a five-day losing streak since November 2016, just before the USA presidential election. It's fallen 6.3 per cent over the last five days.

Declining issues outnumbered advancing ones on the NYSE by a 7.27-to-1 ratio; on Nasdaq, a 7.05-to-1 ratio favoured decliners.

The market had enjoyed a stretch of relative calm, where even big intraday losses were erased by the end of the day.

Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on Wednesday.

Some of the big losers were stocks that have scored double-digits gains this year.

The yield on the 10-year Treasury is 3.20%, the highest level in seven years. Among internet companies, Alphabet, Google's parent company, slid 2.3 per cent to US$1118.79.

The two-year yield soared to its highest mark since 2008.

Oil prices were lower, with the USA benchmark West Texas Intermediate losing nearly $2 to trade at just over $73 United States a barrel.

USA stocks plunged Wednesday as investors ramped up their selling of high-flying technology and internet stocks.

"We've scratched our heads about the rise in stocks for the past 18 months". But eventually the higher rates worry stock investors, as they tend to increase borrowing costs and cut into profit margins. The Fed has predicted that unemployment will remain below 4 per cent through 2020 and inflation is expected to track around 2 per cent, conditions that Federal Reserve chief Jerome Powell called "remarkably positive".

Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in US interest rates.

Adams, of Bloomberg Intelligence, said investors have concerns about their future profitability, too.

"Amazon recently announced they were increasing wages, Facebook is spending a ton on security", she said.

Insurance companies slumped as Hurricane Michael hit the Florida Panhandle.

Sears Holdings plunged 37 per cent after the Wall Street Journal reported that the struggling retailer is preparing a bankruptcy filing. The stock fell 15 per cent to 50 cents.



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