New York: Wall Street stocks plunged Friday afternoon as disappointing earnings from big companies and worries about higher interest rates accelerated a sell-off as the first bad trading week of 2018 neared conclusion.
At about 1940 GMT, the Dow Jones Industrial Average was down more than 500 points, or 2.0 percent to 25,664.38.
The broad-based S&P 500 dropped 1.7 percent to 2,775.32, while the tech-rich Nasdaq Composite Index sank 1.4 percent to 7,285.45.
Analysts have been eyeing a rise in US bond yields this week that accelerated further on Friday after a stronger-than-expected US jobs report raised expectations more Federal Reserve interest rate increases could be coming.
US stocks opened 2018 on a tear, with the Dow surging above 25,000 and then 26,000 points in quick succession. But investors have started to question the valuations if the Fed’s so-far benign pace of interest rate hikes accelerates.
“Investors just felt the market had gone too high for too long,” said Sam Stovall, chief investment strategist at CFRA Research.
“The yield in the 10-year (US Treasury) note moving above 2.5% earlier in the week started the sell-off and was accelerated by today’s employment report.”
Adding to the market’s dim mood was a batch of largely underwhelming earnings reports from big companies that prompted dropping prices for key stocks. These included Dow members Apple, down 3.4 percent, Chevron, down 4.9 percent and ExxonMobil, down 5.3 percent.
Source: Brecorder.com
