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Wall Street reels as Dow Jones falls over 800 points

08 December 2018

PHOTO: Trader Michael Milano works on the floor of the New York Stock Exchange, Nov. 28, 2018.

Technology companies, banks and industrial stocks accounted for much of the broad sell-off. The Dow Jones plunged nearly 800 points, while the S&P 500 was driven lower by financials, which shed nearly 4.4 per cent.

The Dow Jones Industrial Average slipped by 2.5pc mid-session on Tuesday, with industrial companies and financials leading the declines.

The S&P 500 .SPX opened lower by 7.94 points, or 0.28 percent, at 2,782.43.

Then there's the tariff war between China and the United States, which threatens to upend trade relations between the world's two largest economies.

The movements in the bond market "clearly show that growth is likely to slow next year and inflation too", said Karl Haeling of LBBW. An inverted yield curve has also preceded each recession of the last 60 years, though sometimes by more than a year. The yield on five-year Treasury bonds has fallen below the yield on a three-year bond for two days running, meaning that USA investors are being paid more to hold government debt that matures in three years than in five years. JPMorgan Chase sank 4.5 percent.

Bond prices soared sharply, sending yields lower, as traders shoved money into lower-risk investments.

ANALYST'S TAKE: "Positive sentiment from the China-U.S. trade war truce dissipated quickly", said Eugene Leow and Radhika Rao of DBS Group in a report.

The Nasdaq is down 172.11 points, or 2.3 percent. Advanced Micro Devices dropped 9.4 percent to $21.49, while Micron Technology lost 6.4 percent to $37.47. The contract rose 30 cents on Tuesday to close at $53.25. The Standard & Poor's 500 slid 3.2 percent to 2,700.06. Brent crude, used to price worldwide oils, lost 63 cents to $61.45 per barrel in London.

The dollar weakened to 113 yen from 113.69 yen late Monday.

By 10.05 am the NZX-50 was off by 112 points at 8753, following an 800-point fall on Wall Street's Dow Jones index.

AutoZone climbed 5.6 percent to $870.65 after the auto parts retailer delivered third-quarter earnings that exceeded analysts' forecasts. The euro strengthened to $1.1349 from $1.1342.

European markets closed lower yesterday: London's FTSE fell 0.6per cent, Paris dropped 0.8 per cent and Frankfurt shed 1.1 per cent.

Apple Inc, one of Monday's leaders, dropped 2.0 percent as supplier Cirrus Logic Inc trimmed its revenue outlook, adding to growing evidence that the latest iPhones are not selling well.

Wall Street reels as Dow Jones falls over 800 points