Dow, S&P 500 suffer worst one-day fall in five months

Feb 01, 2018, 00:51
Dow, S&P 500 suffer worst one-day fall in five months

Rising bond yields and a sell-off in healthcare shares sent the USA stock market sliding on Tuesday, with the Dow Jones Industrial Average's 352-point tumble its steepest in eight months. This lead to stocks on Wall Street falling by around one per cent. While the UK's FTSE 100 Index tumbled by 1.1%, the German DAX Index and the French CAC 40 Index dropped by 1% and 0.9%, respectively.

That should help stocks keep climbing, Mr. Hans said, even as bond yields head higher. These sectors were negatively affected by higher interest rates. The S&P 500 still is up 6.7% since the end of 2017.

Stocks fell lower due to a decline in energy shares amid ongoing evidence of rising USA crude output.

Bond yields have been rising steadily over the past few months, making bonds more appealing to investors seeking income.

The CBOE Volatility Index, the main gauge to measure fears of a near-term drop, was 12.98, its highest since December 1.

Robert Pavlik, chief investment strategist at SlateStone Wealth, said: "I think despite this selloff, all indications point to a firming economy and I do expect to see some bargain hunters step in soon".

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Also on investors' radar: Tuesday night's State of the Union address and a two-day meeting of the Federal Reserve's policymaking committee that wraps up Wednesday.

"Investors are getting a bit anxious about inflation which has led some people to believe that the Fed might be more aggressive when it comes to raising rates", said Robert Pavlik, chief investment strategist at SlateStone Wealth.

The dollar, which fell sharply last week, declined to 108.78 yen from 108.94 yen late Monday. Personal Spending rose 0.4%, but this was slightly below the 0.5% estimate. Across the Korean Strait, the Kospi bucked the downward trend to climb 0.31%. The contract plunged $1.06 on Tuesday to $64.50.

Among earnings, Pfizer shares fell 3.3 percent.

Several big-name companies are due to report quarterly results on Wednesday and Thursday, including Apple, Amazon, Microsoft, Facebook and Google's parent company Alphabet.

Harley-Davidson dropped 8.1 percent after the motorcycle maker forecast a drop in shipments this year.

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Apple shares fell as much as 2.6 percent after the Nikkei reported the company will halve the production target for its flagship iPhone X this quarter.

Declining issues outnumbered advancers on the NYSE by 2,388 to 539.

The Nasdaq has pounded out a 7.2% advance so far this month, its best monthly showing since October 2015 - and its best January performance since the market rebound of 2001.

The S&P 500 posted 126 new 52-week highs and three new lows; the Nasdaq Composite recorded 153 new highs and 29 new lows.

The slide was the second uncharacteristically big move in two days, after dropping 177 points on Monday.

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