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Bloodletting resumes on Wall Street, Dow closes down 2%

/ 06:19 AM December 18, 2018
20181121 US Stocks Wall Street Technology Plunge Dive

A trader works at his desk during the closing bell on the floor of the New York Stock Exchange (NYSE), on November 20, 2018, in New York City. US stocks sold off on Monday, Dec. 18, 2018, for a second straight session, as investors continued to fear weakening global growth and major indices hit new lows for the year. AFP

NEW YORK, United States – US stocks sold off on Monday for a second straight session, as investors continued to fear weakening global growth and major indices hit new lows for the year.

The benchmark Down Jones Industrial Average fell more than 500 points, or 2.1 percent, to close at 23,592.98 while the broader S&P 500 also fell 2.1 percent, settling at 2,545.83.

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The Nasdaq lost 2.3 percent at 6,753.73, falling below its closing level for 2017.

All three indices are in correction, with the S&P and Nasdaq touching their lowest levels of 2018.

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The sell-off came several hours after President Donald Trump renewed his attacks on the Federal Reserve, calling on policymakers not to raise interest rates even though they are widely expected to do so this week.

Wall Street has feared higher interest rates but analysts also said comments from Jeffrey Gundlach, founder of a major investment fund, helped accelerate the sell off Monday after he said it was likely the stocks were already in a bear market — widely defined as a 20 percent drop from the most recent peak.

Quincy Krosby of Prudential Financial also told AFP the S&P 500 was approaching key technical levels that could trigger automated selling.

“Gundlach is considered an excellent manager,” Krosby said. “He said that this market looked like a bear market and perhaps it would go lower.”

Economic data released early Monday added to the growth concerns: a survey of manufacturing activity in the New York region showed an unexpected plunge, while an index of sentiment among homebuilders also fell sharply.

And on Friday, a batch of dispiriting economic data from China added Wall Street jitters.

“This is the extension of everything that has bothered the markets for the last several weeks. The US economic news added to the selloff,” said Karl Haeling of LBBW told AFP.

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“There are reasons to think the US economy is going to slow next year.”

Among individual stocks, investment bank Goldman Sachs dropped 2.7 percent following Malaysian authorities’ decision to bring criminal charges against the firm over the 1MDB investment fraud.

US cosmetics and drug maker Johnson & Johnson also continued to suffer, losing 2.9 percent in the wake of last week’s Reuters report that the company was aware for years of the presence of asbestos in talcum powder. /cbb

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TAGS: Business, Dow Jones, Jeffrey Gundlach, NASDAQ, Stock Market, stocks, Wall Street
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