Dow Jones drops 832 points in third worst drop in history

Dow Jones drops 832 points in third worst drop in history

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

Earlier this morning, Wall Street suffered its worst trading day in eight months, with the Dow Jones Industrial Average plunging 832 points to 25,599. Apple and Amazon both had their worst day in two and a half years.

Stock prices have been hurt by rising interest rates, which have boosted Treasury yields over the last week.

The drop led a wider drop in United States markets.

"The tax cuts juiced earnings this year and that's not sustainable", he said.

"It's quite a challenge for stocks when there is no natural shock absorber from bonds", said Nicholas Colas, Co-founder of DataTrek Research.

The S&P 500 and tech-heavy Nasdaq joined in Wednesday's carnage, falling 3.3 percent and 4.1 percent, respectively. The benchmark USA stock index hadn't suffered a five-day losing streak since November 2016, just before the presidential election.

Canadian stocks also fell on Thursday, weighed down by a more than 2-per-cent drop in healthcare and energy stocks amid a broad based sell-off in global equities.

The Dow Jones Industrial Average lost 91 points, or 0.4 percent, to 25,506. That was its biggest loss since March 22.

Some of the biggest losers were tech companies. Alphabet has dropped 15 percent since late July. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.

Luxury retailers tumbled after LVMH, the parent of Louis Vuitton, said its sales growth in China slowed. Jeweler Tiffany, handbag makers Michael Kors and Tapestry tumbled between 4.9 and 7.2 percent.

Chinese state councilor meets USA state secretary, calling for win-win cooperation
Mr Pompeo told reporters in Pyongyang the two "had a great, great visit" and that Mr Trump sent his regards. Moon also said there was a possibility of Kim holding a summit with Japanese Prime Minister Shinzo Abe.

The Treasury held the following auctions: three-year note at 2.989%, 10-year note at 3.225%. The yield was just 2.82 percent in last August. Esterline climbed 30.6 per cent to $115.97 while TransDigm slipped 2.9 per cent to $341.20.

Historically, according to Goldman Sachs, rising bond yields have not posed major issues for stocks as long as their ascent has been gradual.

"The speed of changes in bond yields often matters more for equities than the level", Goldman Sachs strategists said in a note.

All of those factors could threaten the impressive profits Corporate America has been reporting this year.

Earlier in the day, stocks briefly turned positive before extending their losses.

"Amazon recently announced they were increasing wages, Facebook is spending a ton on security", she said. Only 17 stocks in the S&P 500 wound up with a gain.

Sears Holdings nosedived after the Wall Street Journal reported that the struggling retailer hired an advisory firm to prepare a bankruptcy filing that could come within days. All fell at least 3 per cent. Brent crude, the global standard, lost 2.2 percent to $83.09 a barrel in London. Brent crude, the global standard, lost 2.2 percent to $83.09 a barrel in London. Heating oil shed 2.6 percent to $2.33 a gallon.

USA gold futures settled up $1.9, or 0.16 percent, at $1,193.4. The Japanese yen strengthened 0.53 percent versus the greenback at 112.36. The pan-European FTSEurofirst 300 index of leading regional shares closed down 1.57 percent.

Globally, France's CAC 40 dropped 1 per cent and the DAX in Germany lost 0.6 per cent. Britain's FTSE 100 sank 1.3 per cent.

The sharp decline in stocks was led by a fall in shares across several of the world's largest technology giants.

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