Dow Industrials Drop 400 Points As Market Losses Deepen

This slideshow requires JavaScript.

NEW YORK — Stocks are sinking again Thursday, extending a streak of losses that has yanked the market away from record highs. The Dow Jones industrial average slumped more than 400 points. The tumult started last Friday as investors worried about signs of rising inflation.

The market fell steadily as the day wore on and is on track for its fifth loss in the last six days. Technology companies, the leading sector over the past year, and banks fell the most.

The Standard & Poor’s 500 index, the benchmark for many index funds in 401(k) accounts, is now down 8.1 percent from the latest record high it set January 26. It’s still up 15 percent over the past year.

Stock trading turned volatile over the last several days, breaking an unusually long period of calm. European markets were also lower after the Bank of England said it could raise interest rates in the coming months.

After huge gains in the first weeks of this year, stocks tumbled Friday after the Labor Department said workers’ wages grew at a fast rate in January. That’s good for the economy, but investors worried it will hurt corporate profits and that rising wages are a sign of faster inflation. It could prompt the Federal Reserve to raise interest rates at a faster pace, which would act as a brake on the economy.

“Far and away the most important things are the fear that the Fed is going to make a mistake, and higher wages are going to cut into margins,” said Scott Wren, senior global equity strategist for Wells Fargo Investment Institute. The worry, he said, is that the Fed will raise interest rates too quickly.

The S&P 500 shed 40 points, or 1.5 percent, to 2,641 as of 1:45 p.m. Eastern time.

The Dow Jones industrial average lost 446 points, or 1.8 percent, to 24,447. Boeing and Caterpillar took some of the worst losses. The Nasdaq composite fell 114 points, or 1.6 percent, to 6,937.

The losses were broad. Four stocks fell for every one that rose on the New York Stock Exchange, and 10 out of the 11 industry sectors in the S&P 500 index were down.

Bond prices wobbled and turned lower. The yield on the 10-year Treasury note rose to 2.85 percent from 2.84 percent.

High-dividend stocks including phone companies fell. Those stocks are often seen as substitutes for bonds because they tend not to fluctuate that much in price and provide steady income. Those stocks fall out of favor when bond yields rise, as they have been for the past few months, and many expect the trend to continue. The yield on the 10-year note was as low as 2.04 percent as recently as September.

The market didn’t get much help Thursday from company earnings reports, several of which disappointed investors. While U.S. companies mostly did well at the end of 2018, a number of them had a weak finish to the year.

Hanesbrands, which makes underwear, T-shirts and socks, reported a smaller profit than investors expected, and its forecast for the current year didn’t live up to analysts’ estimates either. The company also said it will pay $400 million to buy Australian retailer Bras N Things. The stock dropped $2.10, or 9.6 percent, to $19.86.

IRobot, which makes Roomba vacuums, plummeted 31 percent after projected a smaller annual profit than Wall Street was expecting. The stock dropped $27.39 to $60.65.

Twitter had a banner day, soaring 17 percent after turning in a profit for the first time. Its fourth-quarter revenue was also better than expected. The stock rose $4.59 to $31.50.

Online delivery company GrubHub soared after it announced a partnership with Yum Brands, the parent of Taco Bell and KFC. GrubHub will provide the delivery people and technology to let people order food from those restaurants. GrubHub jumped $19.66, or 28.1 percent, to $89.57, while Yum Brands dipped $1.72, or 2.1 percent, to $78.41.

After a sharp loss Wednesday, benchmark U.S. crude lost 61 cents, or 1 percent, to $61.18 a barrel in New York. Brent crude, the international standard for oil prices, gave up 75 cents, or 1.1 percent, to $64.77 per barrel in London.

Stocks in Europe declined and bond yields increased after the Bank of England said could raise interest rates in coming months because of the strong global economy. That also sent the pound higher. Britain’s FTSE 100 fell 1.5 percent and the French CAC 40 lost 2 percent. Germany’s DAX declined 2.6 percent.

In Tokyo the Nikkei 225 index rose 1.1 percent. South Korea’s Kospi gained 0.5 percent and the Hang Seng of Hong Kong rose 0.4 percent.

By MARLEY JAY - FEB 8. 2018 - 2:02 PM EDT AP

____

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jayt
Youkyung Lee in Seoul and Kelvin Chan in Hong Kong contributed to this report.

 

0 Comments

You can be the first one to leave a comment.

Leave a Comment

 

News Sources

  • ABC
  • Access Hollywood
  • Associated Press
  • BBC
  • Bloomberg
  • Boston Globe
  • C-SPAN
  • CBS
  • Chicago Sun-Times
  • Christian Science Monitor
  • Center for Public Integrity
  • CNN
  • Congressional Quarterly
  • Democracy Now!
  • Digg
  • E! Online
  • Entertainment Weekly
  • Financial Times
  • Forbes
  • Foreign Policy
  • Fortune
  • Front Street Magazine

  • U.S. News, World News
  • Business, Politics
  • Entertainment, Sports
  • Art, Lifestyle
  • Videos And More
  • News Sources

  • Fox News
  • Google News
  • Guardian
  • Huffington Post
  • Independent
  • LA Weekly
  • Los Angeles Times
  • McClatchy
  • Mother Jones
  • National Journal
  • NBC New
  • New York Post
  • New York Times
  • Newsweek
  • Newsy
  • NPR
  • PBS NewsHour
  • People
  • Politico
  • Reuters
  • TPM
  • Washington Post
  • Thanks For Your Support!

    Advertisement
     

    Copyright © 2018 Front Street. All Rights Reserved.