Wall Street stocks plunge in chaotic session, S&P 500 erases 2018 gains

Feb 07, 2018, 01:21
Wall Street stocks plunge in chaotic session, S&P 500 erases 2018 gains

But a massive fall in share prices prompted an about-turn, and on Tuesday, it fell back to as low as 2.662 percent.

The decline was the largest since the index dropped 1,286.33 points in June 2016 and the closing level was its lowest since October 23. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy.

A key jobs report on Friday - showing strong growth in the USA labour market - appears to have been the catalyst for the rally to come to a halt, at a time when some observers have suggested a so-called correction might be due.

The Dow Jones Industrial Average saw its steepest ever one-day point drop on inflation fears, wiping 4.6 percent off the value of America's 30 largest companies to finish at 24,345.75, having at one point plummeted almost 1,600 points to a low of 23,923.88.

Japan's Nikkei 225 index closed with a fall of 5.3% and Hong Kong's Hang Seng fell by 4.7%.

Toyota, which is to announce earnings later Tuesday, was down 3.14 percent at 7,265 yen while Canon fell 3.15 percent to 4,112 yen.

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Monday's stock market rout left two of the most popular exchange-traded products that investors use to benefit from calm rather than volatile conditions facing potential liquidation, market participants said.

The CBOE Volatility index, the closely followed "fear-index" measure of expected near-term stock market volatility jumped 20 points to 30.71, its highest since August 2015.

The ructions in markets come after investors have ridden a almost nine-year bull run, with low global rates sparking a revival in economic growth and bright corporate earnings.

The worries arrived at a time when the Dow and many other major stock indexes were trading near record highs.

Bitcoin also tumbled, hitting a 12-week low of $6,600. Those stemmed from the U.S.jobs report on Friday.

Despite the sea of red in global stock markets, there are hopes that the retreat won't last long given that global economic growth has picked up and the financial system is more robust since the financial crisis.

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On Monday, the Dow finished down 4.6 percent at 24,345.75, while the S&P 500 sank 4.1 percent, to 2,648.94. The last fall of that size came in August 2011 when investors were fretting over Europe's debt crisis and the debt ceiling impasse in Washington that prompted a USA credit rating downgrade.

Wall Street stocks plunged in chaotic trading today, as the Dow's gains for 2018 were erased in a brutal pullback from months of stock market euphoria that had been acclaimed by President Donald Trump.

Still, while some financial assets became more attractive to investors as perceived havens of value.

U.S. crude futures traded at $63.56 per barrel, down 0.8 percent in Asia.

The U.S. dollar remained resilient despite the stock market sell-off, which at one stage Monday saw the Dow shed 1,597 points.

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