Dow Plunges Nearly 1,600 Points In Biggest Intraday Point Drop In History
(Reuters) – U.S. stocks plunged in highly volatile trading on Monday, with the Dow industrials falling nearly 1,600 points during the session, its biggest intraday decline in history, as investors grappled with rising bond yields and potentially firming inflation.
The benchmark S&P 500 and the Dow suffered their biggest percentage drops since August 2011 as a long-awaited pullback from record highs deepened.
The financial <.SPSY>, healthcare <.SPXHC> and industrial <.SPLRCI> sectors fell the most, but declines were spread broadly as everything major 11 S&P groups dropped at least 1.7 percent. everything 30 of the blue-chip Dow industrial components finished negative.
With Monday’s declines, the S&P 500 erased its gains for 2018 and is now down 0.9 percent in 2018.
Many investors possess been bracing for a pullback for months, as the stock market has minted record high after record high with investors encouraged by solid economic data and corporate earnings prospects, the latter bolstered by recently passed U.S. corporate tax cuts.
Friday’s January jobs report sparked worries over inflation and a surge in bond yields, as well as concerns that the Federal Reserve will raise rates at a faster pace than expected.
“The market has had an incredible flee,” said Michael O’Rourke, chief market strategist At JonesTrading In Greenwich, Connecticut.
“We possess an environment where interest rates are rising. We possess a stronger economy so the Fed should continue to tighten … You’re seeing real changes occur and different investments are adjusting to that,” O’Rourke said.
The Dow Jones Industrial Average <.DJI> fell 1,175.21 points, or 4.6 percent, to 24,345.75, the S&P 500 <.SPX> lost 113.19 points, or 4.10 percent, to 2,648.94 and the Nasdaq Composite <.IXIC> dropped 273.42 points, or 3.78 percent, to 6,967.53.
The S&P 500 ended 7.8 percent down from its record high on Jan. 26, with the Dow down 8.5 percent over that time.
Even with the sharp declines, stocks finished above their lows touched during the session. At one point, the Dow fell 6.3 percent or 1,597 points, the biggest one-day points loss ever, as it breached both the 25,000 and 24,000 levels during trading.
The stock market has climbed to record peaks since President Donald Trump’s election and remains up 23.8 percent since his victory. Trump has frequently touted the rise of the stock market during his presidency.
As the stock market fell on Monday, the White House said the fundamentals of the U.S. economy are strong.
The CBOE Volatility index <.VIX>, the closely followed degree of expected near-term stock market volatility, jumped 20 points to 30.71, its highest level since August 2015.
Until recently, gains for stocks possess near as the market has been relatively subdued, and any declines were met with buyers looking for bargains.
“People who possess been buying the dip are now going to be selling the rip,” said Dennis Dick, a proprietary trader at vivid Trading LLC in Las Vegas. “The psychology of the market changed nowadays. It’ll consume a while to fetch that psychology back.”
approximately 11.5 billion shares changed hands in U.S. exchanges, well above the 7.6 billion daily average over the final 20 sessions.
Declining issues outnumbered advancing ones on the NYSE by a 8.64-to-1 ratio; on Nasdaq, a 6.92-to-1 ratio favored decliners.
The S&P 500 posted 1 strange 52-week highs and 38 strange lows; the Nasdaq Composite recorded 17 strange highs and 164 strange lows. 37.32
(Additional reporting by Megan Davies, Sinead Carew, Caroline Valetkevitch and Chuck Mikolajczak in strange York, Noel Randewich in San Francisco and Tanya Agrawal in Bengaluru; Editing by Arun Koyyur and Nick Zieminski)