Stocks have their worst day in months; Dow drops 800-plus points

Stocks have their worst day in months; Dow drops 800-plus points

Stocks have their worst day in months; Dow drops 800-plus points

Oil prices slumped to two-week lows as global stock markets fell, with investor sentiment made more bearish by an industry report showing US crude inventories rising more than expected. The Dow and other major USA stock indexes fell more than 3%.

A surge in Treasury yields appears to be fueling the losses, as the 10-year US Treasury yield spiked last month and has continued to climb throughout October, landing at 3.21 per cent. Tech stocks saw slight recoveries as well after being hit hard on Wednesday. The Nasdaq's 2-percent drop pulled it 7.1 percent away from its high.

Wall Street expects S&P 500 companies to report third-quarter earnings growth of 21.3 percent for the third quarter according to I/B/E/S data from Refinitiv.

USA consumer prices rose less than analysts had forecast in September, reducing expectations the pace of inflation is accelerating despite a tightening labor market.

Amazon shares declined 6.2% on Wednesday. Stocks continue to retreat on Wednesday, with 10 of the 11 sectors in the red and bond yields continuing to march higher. Some early relief over a tame report on inflation gave way to renewed selling.

"If investors are going to take profits then it will be from some of the bigger, high-growth names", Nauman said.

1 p.m.: This article was updated with the close of markets.

Bond yields, which have spiked over the last week, slid after the Labor Department said consumer prices rose less than economists expected in September.

This time around, strong economic data anxious bond investors, who sent the benchmark yield on Tuesday to 3.261 percent, the highest since early May 2011. Barclays is particularly concerned about a choppy earnings season for tech companies. Chip gear producers Applied Materials, Teradyne and ASML Holdings fell between 3.5 percent and 4.6 percent.

The S&P 500 index fell 12 points, or 0.4 percent, to 2,772.

The Dow Jones Industrial Average fell 198.28 points, or 0.77 per cent, to 25,400.46.

Gold rose 0.2 per cent to $1,193.40 an ounce. USA markets rebounded briefly after it was announced that President Trump would meet with Chinese leader Xi Jinping at next month's G-20 summit in Buenos Aires to discuss the intensifying trade conflict.

All three of our favorite companies experienced steep market losses today. Also known as Wall Street's "fear index", the VIX tends to rise when stocks are down.

The drop in yields hurt banks, and JPMorgan Chase fell 3 percent to $1078.13 while Bank of America sank 3 percent to $28.36.

The S&P was down almost 4 percent in less than five sessions as of Wednesday afternoon. The benchmark S&P 500 dropped below its 200-day moving average price, while the Dow Jones Industrial Average slipped below its 100-day moving average.

The Nasdaq composite has fallen 9.7 percent since it set a record high in late August.

But a recent International Monetary Fund warning on global growth taking a hit from trade disputes has hit confidence in the stock market, as has US Treasury yields at more than 7-year highs, signalling a tightening of capital globally.

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