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Overnight Markets: US stocks plummet to close in correction territory

Overnight Markets: US stocks plummet to close in correction territory

US stocks plummeted nearly 4% on Thursday in another dramatic session as investors continued to fret about the possibility of rising inflation and higher interest rates.

The Dow Jones Industrial Average plunged 1,033 points, or 4.15%, to 23,860, the S&P 500 lost 101 points, or 3.75%, to 2,581 and the Nasdaq Composite dropped 275 points, or 3.9%, to 6,777.

With the losses that accelerated late in the trading day, the benchmark S&P 500 and the Dow industrials confirmed they were in correction territory, both falling more than 10% from 26 January record highs.

 “The dust hasn’t settled yet, and I think both buyers and sellers are trying to figure out what this market really wants to do,” said Jonathan Corpina, senior managing partner for Meridian Equity Partners in New York.

The sharp selloff in recent days was kicked off by concerns over rising inflation and bond yields, sparked by Friday’s January US jobs report.

Earlier on Thursday, the 10-year US Treasury note yield rose as high as 2.884%, nearing Monday’s four-year peak of 2.885%, after the Bank of England said interest rates probably needed to rise sooner than previously expected.

Analysts at Barclays, Bank of America and JP Morgan estimate that volatility-targeting traders will sell roughly $200 billion of equities this week, leading to more pressures on markets.

All 11 major S&P sectors finished lower, with financials and technology the worst-performing groups. Amazon (AMZN.O) and Facebook (FB.O) were among the biggest drags on Thursday.

Shares in Tesla Inc. fell 8.6% after the maker of electric cars late Wednesday posted a narrower-than-expected adjusted loss for the fourth quarter.

21st Century Fox Inc. shares slid 4.2% after the media company reported better-than-anticipated earnings late Wednesday.

Shares of Twitter Inc. soared 12% after the microblogging company delivered better-than-expected financial results and reported its first-ever quarter of profitability.

Kellogg Co. reported fourth-quarter net income of $428.0 million, compared with a loss of$53.0 million for the same period last year. Its shares were up 2.8%.

In Asia, share markets plunged on Friday in morning session following Wall Street that closed in a correction territory for the first time in two years.

Japan’s Nikkei Stock Average led the declines, skidding 2.64%. Indexes in Australia and New Zealand each fell 1.08%. South Korea’s Kospi was down 1.61% in early trading. Singapore’s Straits Times Index declined 1.59%.

In Hong Kong, the Hang Seng Index plunged 3.56%, while on the mainland, the Shanghai Composite Index was trading 4.10% lower.

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