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Overnight Markets: Dow plunges 1,175 points as selloff deepens

The declines for the S&P 500 and the Dow were the biggest single-day percentage drops since August 2011.

Overnight Markets: Dow plunges 1,175 points as selloff deepens

US stocks plunged in highly volatile trading on Monday, with the Dow recording its worst intraday decline in history and the S&P 500 slumping more than 4.0%.

The Dow Jones Industrial Average fell 1,175 points, or 4.6%, to 24,346, the S&P 500 lost 113 points, or 4.10%, to 2,649 and the Nasdaq Composite dropped 273 points, or 3.78%, to 6,968. The declines for the S&P 500 and the Dow were the biggest single-day percentage drops since August 2011.

The upward trend in stock exchanges in New York came to a halt on Friday after a key jobs report showed strong growth in the US labour market. It could mean sharper increases in interest rates should the US Federal Reserve feel the need to curb inflationary pressure.

Market professionals had been predicting a pullback for some time, noting that declines of 10% or more are common during bull markets. The signs of inflation and rising rates are not as bad as they looked, but after the market's big gains in 2017 and early 2018, stocks were overdue for a drop, David Kelly, the chief global strategist for JP Morgan Asset Management, said.

As the stock market fell yesterday, the White House said the fundamentals of the US economy are strong. US economic growth was running at a 2.6% annualised rate in the fourth quarter last year and the unemployment rate is at a 17-year low of 4.1%.

The biggest declines came in financial and energy shares. Health care, technology and industrial companies also took outsize losses.

Wells Fargo Inc. skidded 9.2% after the bank said Fed sanctions over customer-accounts scandals could cut into profit by as much as $400 million this year.

Bristol-Myers Squibb Co. fell 4% despite reporting positive results for advanced lung-cancer trial results, along with fourth-quarter profit and revenue beats.

Qualcomm Inc.’s stock slid 6.6%, erasing a premarket gain that came after Broadcom Ltd. boosted its bid to buy the chip maker by 17%. Broadcom was down 3.1%.

Corcept Therapeutics Inc. tumbled 26% after the drugmaker disclosed that it had been informed Teva Pharmaceutical Industries Ltd. had submitted a new drug application for a generic version of Corcept’s hyperglycemia treatment Korlym. US-listed shares of Teva fell 4%.

In Asia, stocks tumbled early on Tuesday, mirroring massive losses seen stateside in the last session.

Japan's Nikkei 225 was down 4.95% as stocks across sectors pulled back. Across the Korean Strait, the Kospi declined 2.26%. Down Under, the S&P/ASX 200 declined 3.03%.

The Hang Seng Index was down 3.15% in early trade. On the mainland, the Shanghai composite slid 1.52%.

3 comments so far. Why not have your say?

Alastair Kendall

Feb 06, 2018 at 08:13

.....and so it starts.

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Feb 06, 2018 at 10:42

Not sure it's "the big one", to be honest.

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Alastair Kendall

Feb 06, 2018 at 17:23

I guess, none of us really know ....otherwise I would be sitting on my BFY in the BVI sipping a margarita. Still I am 20% cash; 20% gold; 10% TIPs and 15% hedge funds and still feeling pretty nervous truth be told.

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Charles Stanley drops Woodford from fund buy list

by Daniel Grote on May 22, 2018 at 10:57

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