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Dow tumbles more than 4% as US stock losses deepen

09 February 2018

Tokyo's Nikkei 225 was off 3.2 percent at 21,180.28 and Hong Kong's Hang Seng fell 4.2 percent to 29,142.87. South Korea's Kospi also rose at its opening, and was trading up almost 0.1 percent at 2,455.47 in morning trading. American Express and Intel were the two biggest losers on the Dow. Germany's DAX declined 2.6 percent.

Wall Street stocks closed the day in the red after gaining earlier.

The markets yesterday represented one of the scariest days in trading this year as the Dow Jones industrial average plunged past 1,175 points or 4.6 percent thus erasing the gains it had made thus far. While U.S. companies mostly did well at the end of 2017, a number of them had a weak finish to the year. The S&P 500 index, a broader market gauge, has also slipped into a correction, as it is down 10.2 now.

Big drops Friday and Monday erased the Dow's gains for the year. That combination usually carries stocks higher.

"What we're seeing today is continued concerns around interest rates going higher, around valuations in the stock market", said Zaccarelli.

USA budget agreement reached
The Bipartisan Budget Act of 2018 lifts defense sequestration caps the Obama administration placed on the Pentagon . The BBC says that many Democrats are unhappy with the bill, as it fails to address the issue of immigration .

IRobot, which makes Roomba vacuums, plummeted 30 percent after projected a smaller annual profit than Wall Street was expecting. The Nasdaq composite was up 115 at 7,083.

A wild day for U.S. markets on Monday caused panic to spread. Those stocks are often seen as substitutes for bonds because they tend not to fluctuate that much in price and provide steady income. The Dow is up 23 percent over that time, the S&P 500 17 percent.

He did keep an eye on the market's performance during his congressional testimony Tuesday morning. They know markets have cycles, and their record for coming out of downturns is 100 percent.

"Now that the volatility event is over, investors will focus on the economic data and the fundamentals", said Sameer Samana, global equity and technical strategist at Wells Fargo Investment Institute in St. Louis.

ANALYST'S VIEW: "Risk sentiment continues to be wobbly in markets, with USA equities notching a loss at the close, while Brent prices fell sharply to $65 overnight", Mizuho Bank said in a daily commentary. The VIX Volatility Index was lower at 27.73 for a loss of -2.25 points or -7.51%.

Congress Working To Avoid Government Shutdown
The bipartisan compromise would provide the Pentagon and domestic programs with an extra $300 billion over the next two years. Schumer called the budget "An historic, bipartisan budget deal " that will increase federal investments in NY .

The Nasdaq composite lost 212 points, or 3 percent, to 6,838.

Several factors are contributing to the return of neck-wrenching volatility this week after years of absence in the market. European shares rose around 0.7 percent, while Asian markets were mixed. Natural gas added 1 cent to $2.76 per 1,000 cubic feet. Monday's stock crash brought the Industrial Average down by 3.8 percent to 24,547 points.

The Standard & Poor's 500 index was up 12 points, or 0.5 percent, at 2,662.

Industrial companies and banks are rising while technology companies decline and energy firms slump along with oil prices.

The rout marked a stark turnabout in investors' mood from just two weeks ago, when indexes set their latest record highs. If the S&P declines 20% at any point in the day, trading is called off for the day. The Dow quickly recovered much of that loss. And the yield on 10-year Treasury bills reached a four-year high of 2.88 percent, reigniting fears that interest rates and inflation would move higher faster than expected. The Dow is now up 0.8 percent for the year and 6.4 percent below its January 26 peak.

Winter Weather Advisory Issued from 4 pm to Midnight Monday
The snow arrived a little later than expected, too, starting in Portland around noon and in the Bangor area around 2 p.m. Forecasters there said that while a few strong wind gusts are possible, winds will likely stay below severe limits.

Dow tumbles more than 4% as US stock losses deepen