Wall Street Had Another Very Bad Day Thursday

Not doin' too well
Wall Street
(Photo: Reuters)

Some good news would be great at this time. U.S. equity markets were again savaged for a second straight day Thursday by massive sell-offs due to reasons that remain precisely unclear.

There already is talk about a Great Recession redux while the role of Trump's trade war is now being viewed as a factor that made things a lot worse.

The result of this contagious loss of confidence, however, was another bloodbath which, while not as painful as Wednesday's, nevertheless saw stocks again plunge sharply Thursday. Analysts said investors are dropping equities worldwide fearful of rapidly rising interest rates and a possible global economic slowdown due to Trump's trade war.

The blue-chip Dow Jones Industrial Average closed 545.91 points lower at 25,052.83, bringing its two-day losses to more than 1,300 points. The combined two-day loss wiped-out the Dow's gains for the entire year.

The Standard & Poor's 500, the large-company stock index, dipped 2.1 percent to 2,728.37 and recorded its sixth straight decline. The S&P 500 has lost 6 percent so far this month and is now higher by just 2 percent for 2018.

The NASDAQ Composite fell 1.3 percent to 7,329.06. The broad index also closed below its 200-day moving average for the first time since April.

The Dow fell as much as 698.97 points at its lows during the day. The indices temporarily recovered after a report Trump and Chinese President Xi Jinping planned to meet at next month's G-20 summit. This rumor did instill a fleeting hope the full-blown trade war between both countries might not worsen any further.

Tech stocks, the long-time market leaders, have been hit hard in the latest rout as Chinese tariffs and security concerns over Made in China tech products have put these companies in a bad light. 

Despite this, the NASDAQ is still 9.6 percent off its all-time high in late August. FAANG stocks took a beating. Amazon fell 2.04 percent; Apple stood 0.88 percent lower; Netflix gave up 1.47 percent while Google tripped by 0.18 percent. Facebook, however, ended higher. The NASDAQ, however, performed better than both the Dow and the S&P 500 on Thursday. 

The Russell 2000, an index of small-company stocks, fell into official correction territory after sliding nearly 2 percent in Thursday's wipeout. The index is now 11.2 percent below its August 31 record high.

This is another bad day, according to one analyst. One of the discouraging things is the market really tried to rally during the day and it couldn't hold on to it.

© 2018 Business Times All rights reserved. Do not reproduce without permission.