Dow Drops 366 Points as Reality Sets In
- Author: Eleanor Harrison Dec 28, 2018,
Dec 28, 2018, 0:30
Stocks are down sharply Thursday, making the prior day's strong performance seem like an aberration, as Wall Street stumbles toward what could be its worst December since the Great Depression. Over the two sessions following that gain, the Dow dropped more than 800 points.
Wednesday's gains pulled the S&P 500 back somewhat from the brink of a bear market, where it finished after a shortened trading session Monday.
Even with Wednesday's recovery, US stock markets are still on pace for their worst December since 1931, CNN reported, citing S&P Global Indices.
The S&P 500 is up 41 points or 1.7 percent to 2,391 at midday. He said traditionally, portfolio managers take care of tax-loss selling early in the month, only to window-dress and make their portfolios look good for the new year.
The Australian share market is set to open higher this morning - riding the wave of Wall Street's overnight surge. The Dow was down 375 points, the S&P 500 fell 1.8% and the Nasdaq was down 2.3%. Eastern Time. The Dow slid 585 points, or 2.6 percent, to 22,292.
CNBC noted, "Retailers were among the best performers on Wednesday, with the SPDR S&P Retail ETF (XRT) jumping 4.4 percent". The Nasdaq gained 107 points, or 1.7 percent, to 6,300. The index of 500 large companies traded 1.3 percent higher at 2,381.
But some analysts have argued that the stock market's weakness in December has been disproportionate to economic conditions at a time when unemployment is low and growth is still solid.
Wall Street, Asian markets see dramatic rebound
"The market was pressured by worries over Washington, the Fed and the threat of the trade war sparking a global recession", said Sam Stovall, chief investment strategist at CFRA Research.
Technology companies, a big driver of the market's gains before the October downturn, slumped Thursday.
The rally in NY fed through to Japan, where the Nikkei pulled out of bear market territory to turn 4% higher overnight.
Bond prices fell. The yield on the 10-year Treasury rose to 2.76 percent. And a almost 9% rise in oil prices offered a respite for shares of beaten-down energy companies. Noble Energy slid 5.1 percent to $18.10. Each member of the FAANG cohort rallied at least 6.4 per cent, while energy producers surged as crude powered past US$46 a barrel.
Investors also bought yen, pushing the dollar 0.4 per cent lower versus the Japanese currency and forcing it to cede some of its 1-per-cent overnight rise. The euro rose to $1.1397 from $1.1353. At that bottom, the gauge experienced three days of gains greater than 1.5 percent - and continued on to its best month in 20 years.
The slide in US markets followed a sell-off in major indexes in Europe.
Canada's TSX index, closed for trading Wednesday due to the Boxing Day holiday, was down 16.8 per cent from its all-time high, set in July. However, Germany's DAX and the Britain's FTSE pushed lower, but the indices avoided heavy Monday losses.