Dow sinks another 464 points as slowdown fears worsen

The Nasdaq also set a 10-year record with a 8.4 percent plunge this week, the worst since November 2008. Without a decent rally, this could be the worst December since 1931.

After steady gains through the spring and summer, stocks have nosedived in the fall as investors worry that global economic growth is cooling off and that the USA could slip into a recession in the next few years. It is on track for its biggest one-month loss since February 2009 and its first losing year in a decade. Facebook Inc shares tumbled 6.3 percent, Inc shares slid 5.7 percent and Netflix Inc shares sank 5.4 percent.

He said speculation that the USA economy could be headed for a recession has picked up, dampening global sentiment. The NASDAQ Composite briefly dipped into bear market territory on Thursday and is now down almost 20 percent from its recent high. And rising interest rates in the US could slow its economy even more.

The Nasdaq's fall reflects a sharp move by investors away from what had been the market's leaders - the so-called FAANG group of five favorite technology and internet stocks.

USA stocks closed lower on Friday as investors digested the latest economic data, speech from a central bank official, and the fact that the government is on the verge of a partial shutdown. The Dow Jones Small-Cap Value TSM Index closed at 8514.68 for a loss of -97.57 points or -1.13%.

Treasury Secretary Steven Mnuchin said the market's reaction to the Fed was "completely overblown".

Dow Dives to Lowest Point in 2018 After Fed Rate Hike
Dow Dives to Lowest Point in 2018 After Fed Rate Hike

The US stock market has finished a week-long downward spiral that has many investors fearing a recession is on the way. The Nasdaq Composite closed at 6528.41 for a loss of -108.42 points or -1.63%.

Earlier this week, the US Federal Reserve lifted the interest rate and signalled that it would continue to rise next year, albeit at a slower pace.

After early gains, bond prices headed lower. The S&P 500 index slumped 50.84 points to 2,416.58. The Russell 2000 index of smaller companies dropped another 23.23 points, or 1.7 percent, to 1,326.

Oil prices continued to retreat.

The price of oil has also fallen sharply in recent weeks, down 40 percent from the high it reached in October, amid concerns over a glut in the market and the slowing economy. The yield on the two-year Treasury stayed at 2.65 percent, while the yield on the 10-year note dipped to 2.76 percent from 2.77 percent.

The stock markets in France, Germany, Britain, Italy, Portugal, Spain, Tokyo and Hong Kong also fell.

  • Eleanor Harrison