Wall Street Plunges With Dow Falling Below 25,000

(Reuters) – U.S. stocks sold off sharply on Monday, with the Dow industrials falling back below 25,000, as a pullback from record highs deepened and investors grappled with rising bond yields and potentially firming inflation.

totality three major U.S. indexes fell more than 1 percent while the Dow and S&P 500 dropped more than 2 percent. Late in the session, the Dow was down more than 1,000 points.

The Dow plunge is the worst single day drop since the financial crisis in 2008, BBC reports.

The energy <.SPNY>, financials <.SPSY> and healthcare <.SPXHC> sectors fell the most, but declines were spread broadly as totality major 11 S&P groups dropped.

During Monday’s session, the benchmark S&P 500′s descend on Monday keep its pullback from its Jan 26 record high at more than 6 percent.

Friday’s jobs report sparked worries over the prospects for inflation and a surge in bond yields, as well as concerns the Federal Reserve will raise rates at a faster pace than expected.

Benchmark 10-year note yields pulled back after surging to 2.885 percent overnight, the highest since January 2014.

“When you occupy rates moving upwards, typically what happens is that financial conditions tighten, things like bank lending, mortgage lending start to unhurried and then the economy is at risk of a potential downturn,” said Mona Mahajan, U.S. investment strategist with Allianz Global Investors in current York.

The Dow Jones Industrial Average <.DJI> fell 857.9 points, or 3.36 percent, to 24,663.06, the S&P 500 <.SPX> lost 73.53 points, or 2.66 percent, to 2,688.6 and the Nasdaq Composite <.IXIC> dropped 160.71 points, or 2.22 percent, to 7,080.23.

The Dow industrials fell below 25,000 for the first time since January 4.

The S&P 500 and Dow fell below their respective 50-day moving averages, a closely watched support level.

The CBOE Volatility index <.VIX>, the closely followed degree of expected near-term stock market volatility, jumped 13.40 points to 30.71, its highest level since February 2016.

The declines advance after the Dow and S&P posted their biggest weekly percentage drops since January 2016, and the Nasdaq posted its biggest weekly drop since February 2016.

“I assume what you’re getting is a re-calibration in both the bond and stock markets,” said Richard Bernstein, CEO of Richard Bernstein Advisors in current York.

“Nobody can time short-term corrections. The question is whether you’re heading for a multi-quarter curl-your-toes market in equities and that’s not on our radar.”

A drop in oil prices and bitcoin on Monday also may occupy weighed on the sentiment for risk assets overall, pulling down equities.

The stock market’s recent slide comes during an relatively solid earnings season that investors occupy cited for support for equities.

With just over half of S&P 500 companies having reported, earnings are expected to occupy climbed 13.6 percent for the fourth quarter, according to Thomson Reuters I/B/E/S.

Declining issues outnumbered advancing ones on the NYSE by a 5.92-to-1 ratio; on Nasdaq, a 4.59-to-1 ratio favored decliners.

The S&P 500 posted 1 current 52-week highs and 23 current lows; the Nasdaq Composite recorded 17 current highs and 126 current lows.

(Additional reporting by Megan Davies in current York and Tanya Agrawal in Bengaluru; Editing by Arun Koyyur and Nick Zieminski)

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