Stocks Plunged Yesterday, Erasing All Gains Made For The Entire Year

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The Dow Jones Industrial Average plunged more than 600 points on Wednesday, erasing gains made for the entire year.

U.S. stocks plunged on Wednesday, with the Dow Jones Industrial Average dropping more than 600 points and the S&P falling 3.1 percent to erase gains made for the entire year, Bloomberg News reported.

> The S&P extended its October rout to 8.8 percent, making it the worst month since February 2009. Disappointing earnings from AT&T and Texas Instruments drove declines in the communications and semiconductor groups, offsetting a promising outlook from Boeing. The Dow tumbled 600 points, and the Nasdaq Composite Index lapsed into a correction.

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> “This is really off the walls,” said Donald Selkin, chief market strategist at Newbridge Securities. “Nothing fundamentally changed during the day. I think it’s a technical breakdown. Look at the Nasdaq -- down 300 points.”

Lackluster housing data added to worries that rising interest rates will further depress economic growth, CNBC noted:

> Worries about a slowing economy under pressure from rising interest rates grew after the Commerce Department said new home sales fell to a two-year low. The data also hit homebuilder stocks.The SPDR S&P Homebuilders ETF (XHB) dropped 3.5 percent.

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> "The housing numbers were not good," said JJ Kinahan, chief market strategist at TD Ameritrade. "There's a lot of uncertainty heading into the end of the year. It just feels like people feel more comfortable spending short-term rather than long term."

Other factors contributed to the month’s slide as well: “some earnings disappointment, a brewing conflict between Italy and the European Union over budget spending, criticism of oil power Saudi Arabia over the killing of a dissident journalist and finally, worries that world growth is losing steam.”

Bloomberg noted that Wednesday also added to the mix a series of pipe bombs sent to several prominent Democratic politicians.

More here.

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