The Dow drops 400 points, a day after its record-setting rally

 trader AP Photo / Richard Drew

Stocks fell Thursday as concerns about political turmoil in Washington and trade tensions to weigh on investors, upending Wednesday's rally that had suffered Wall Street to its largest percentage gains in nearly a decade

The Dow Jones Industrial Average falls 2%, or about 500 points, a day after climbing more than 1[ads1],000 points to post its best daily point increase on record. The S&P 500 shed 1.6%, and the Nasdaq Composite dropped 2%. Even after Wednesday's jump, a series of sharp sell-offs have put stocks on their worst month since the Great Depression.

"Buying sentiment towards global equity markets skyrocketed yesterday due to an apparent return of risk appetite and rebounding oil prices , "said Lukman Otunuga, a research analyst at FXTM. "However, with geopolitical risk factors leaving global sentiment extremely fragile, the upside was poised to be limited." Facebook, Alphabet, and Netflix, meanwhile, fall more than 1%.

Oil also pared gains and descended further to a bear market, down more than a third from October highs. West Texas Intermediate was trading at around $ 45.40 at barrel and just under $ 54. Signs of progress remain elusive, however, after President Donald Trump doubled down on demands for his long-promised wall along the southern border.

" itself) has added an extra degree of uncertainty and caution to the markets, "Scott Buchta, a strategist at Brean Capital, said in an email. "As the rhetoric becomes more disruptive and dangerous, investors push back by taking the risk off the table and wait for the dust to settle." [Addingtouncertainty Reuters reported Trump is considering an executive order that would block US companies from using equipment from China's Huawei Technologies and ZTE in the new year. That could stir between the largest economies as they race to settle in a trade dispute ahead of a March deadline.

The dollar slumped against a basket of major peers after consumer confidence readings came in below expectations. Treasury yields also fell, with the 10-year down 4.5 basis points to 2.752% and the 2-year 3.2 basis points lower to 2.577%.

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