Markets Right Now: Stocks end miserable week down 7 percent | AP business

23 December, 2018, 01:49 | Author: Darnell Patrick
  • Dow Jones after market close

At 1:20 p.m. ET, the Dow Jones Industrial Average was down 169.07 points, or 0.74 percent, at 22,690.53, the S&P 500 was down 24.57 points, or 1.00 percent, at 2,442.85 and the Nasdaq Composite was down 127.58 points, or 1.95 percent, at 6,400.83.

The broad-based S&P dropped 1.5 per cent to 2,506.87, while the tech-rich Nasdaq Composite Index sank 2.2 per cent to 6,635.48. An immediate sell-off followed the announcement, with the Dow falling by more than 500 points during Fed Chairman Jerome Powell's press conference. They allow markets to remove speculative froth after a big run-up and give investors a chance to buy stocks at lower prices.

Stocks are opening higher on Wall Street as the market steadies following two days of steep drops.

The S&P 500 is down 132.53 points, or 5.1 percent. It's now down 17.5 per cent from its high of 2,930.75 on September 20.

The benchmark S&P 500 index has slumped 10.6 percent this month and is nearly 16 percent below the peak it reached in late September.

The Nasdaq is down 382.26 points, or 5.5 percent. That hasn't happened yet, but investors fear it will. Inversions are often taken as a sign a recession is coming, although it's not a ideal signal and when recessions do follow inversions in the yield curve, it can take a year or more.

Tokyo Japan Brokerage

The US economic growth was revised down to 3.4 per cent in the third quarter, slower than previously estimated, said the Commerce Department on Friday.

But an array of threats to company earnings has emerged in recent months, from interest rate hikes by the Federal Reserve to the Trump administration-led trade war. Relative to their size, they also tend to carry more debt than larger companies, which could be a problem in a slower economy with higher interest rates.

"China is cooling and the euro zone is slowing down, and some of the economic indicators from the US have been a bit soft recently, but yet the Fed hiked rates and suggested that two more interest rate hikes were lined up for 2019", said Michael Hewson, chief markets analyst at CMC Markets in London.

The last bear market for the S&P 500 ran from October 9, 2007 through March 9, 2009.

On average, bear markets have lasted 14 months in the period since World War II, while market corrections have lasted an average of five months.

Selling in the S&P 500 Index was dominated by underperforming technology stocks. The biggest decline since 1945 occurred in the 2007-2009 bear market. The S&P index recorded no new 52-week highs and 102 new lows, while the Nasdaq recorded four new highs and 659 new lows.


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