Wall St. extends slide with trade and rates in focus

Wall St. extends slide with trade and rates in focus

Reuters  | Oct 11, 2018 05:02PM ET

Wall St. extends slide with trade and rates in focus

By Sinéad Carew

(Reuters) - Wall Street indexes continued their slide in Thursday's volatile session as investors worried about rising interest rates and braced for a trade war hit to corporate earnings a day ahead of the quarterly reporting season kickoff.

In its sixth consecutive day of declines, the S&P closed down 2.1 percent after shedding 3 percent in Wednesday's session. But at its session low the benchmark fell 2.7 percent to its lowest level since early July.

The Nasdaq narrowly avoided confirming a correction. During the session it fell as much as 10.3 percent from its Aug. 29 closing record high but ended the day 9.6 percent below the record.

Investors worried that equity markets would have trouble recovering as rising interest rates coincide with uncertainty about how much earnings growth would be hurt by a U.S. trade war with China.

"People fear that it will be harder to snap back if we’re seeing a cyclical top in earnings with those two headwinds, which are not going away," said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

The Dow Jones Industrial Average fell 545.91 points, or 2.13 percent, to 25,052.83, the S&P 500 lost 57.31 points, or 2.06 percent, to 2,728.37 and the Nasdaq Composite dropped 92.99 points, or 1.25 percent, to 7,329.06.

After hitting an intraday high of 28.84, the CBOE Volatility Index, popularly known as the "fear gauge," ended the day up 2 points at 24.98, its highest close since Feb. 12.

"We saw a rally this morning, and that ended up being a suckers' rally. Then you had buy-the-dippers coming in here saying this was too much too fast," said Dennis Dick, proprietary trader at Bright Trading Llc In Las Vegas.

"Are we out of the woods here? I don't think so," he said. "You're going to see a lot of volatility in the next week or so."

The energy sector, pressured by a drop in oil prices, was the lead decliner, while insurers were some of the biggest losers in the financial sector a day after powerful Hurricane Michael slammed into Florida.

The S&P's 11 major sectors all ended the day in the red with only the communications services sector managing a decline of less than 1 percent.

Energy was the biggest loser with a 3.1 percent drop as oil prices hit two-week lows after an industry report showed a bigger-than-expected build in U.S. crude inventories.[O/R]

The financial sector fell 2.9 percent, also hurt by a 2.7 percent drop in bank stocks a day before three of the biggest banks were to report quarterly results.

Wall Street expects S&P 500 companies to report third-quarter earnings growth of 21.3 percent for the third quarter according to I/B/E/S data from Refinitiv.

The technology sector, the biggest loser in Wednesday's sell-off, closed down 1.3 percent on Thursday.

Stocks had seen some support earlier in the session from U.S. data showing a smaller-than-anticipated rise in consumer prices as it helped ease fears of increasing inflation pressures.

The data helped push U.S. Treasury yields to a one-week low, further soothing equity investors.

But investors still faced a sea of worries, including uncertainty ahead of U.S. midterm congressional elections on Nov. 6, and hawkish comments last week from U.S. Federal Reserve officials.

Declining issues outnumbered advancing ones on the NYSE by a 3.52-to-1 ratio; on Nasdaq, a 2.66-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 62 new lows; the Nasdaq Composite recorded 6 new highs and 291 new lows.

© Reuters. Traders work on the floor of the NYSE in New York

Volume on U.S. exchanges was 11.44 billion shares, its highest level since Feb. and compared with the 7.65 billion-share average for the full session over the last 20 trading days.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Zack Ong
Zack Ong

as proof i said 11hours ago,didnt asia markets gap down and go all the way up?  ... (Read More)

Oct 12, 2018 07:02AM GMT· Reply
Mojo Snake
Mojo Snake

What bounce?  ... (Read More)

Oct 11, 2018 06:49PM GMT· Reply
Sevantilal Patel
Sevantilal Patel

fed and treasury selling bonds like there is no tomorrow. liquidity is tight and getting tighter. but this may be a better way to avoid an eventual big ******off.   ... (Read More)

Oct 11, 2018 04:15PM GMT· Reply
Samuil Shenker
Samuil Shenker

Next stop is ES 2600  ... (Read More)

Oct 11, 2018 04:07PM GMT· Reply
Fabrice Prop trader
Fabrice Prop trader

long !  ... (Read More)

Oct 11, 2018 01:06PM GMT· Reply
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Fusion Media will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Trading or investing in cryptocurrencies carries with it potential risks. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Cryptocurrencies are not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument or cryptocurrencies you should carefully consider your investment objectives, level of experience, and risk appetite.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures), Forex and cryptocurrencies prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (UK) English (India) English (Canada) English (Australia) English (South Africa) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+