Markets Right Now: US stock indexes surge a day after a rout

Futures Slump on Global Riskoff Sentiment; Caterpillar Weighs

Futures Slump on Global Riskoff Sentiment; Caterpillar Weighs

Technology and consumer-focused companied led the declines early Friday.

Other major companies also fell sharply.

As of this week, the Dow Jones and S&P 500 indexes have given up the gains they posted earlier in the year, while the Nasdaq is up only about 2%. Bond prices rose, sending yields lower as traders sought safe-haven investments.

The latest and, perhaps the most high-profile, came last night from Amazon.com Inc and Alphabet Inc, two stocks that have helped power the equity markets decade-long bull run. "That's causing some of this volatility". The Nasdaq composite gave up 329 points, or 4.4 percent, to 7,108. Eastern Time. The index is now headed for its worst month since February 2009, right before the stock market hit bottom following the 2008 financial crisis.

The Dow Jones Industrial Average fell 50 points, or 0.2 percent, to 25,138. The average was briefly down more than 500 points. The tech-heavy index closed down 4.4 percent - the largest single-day loss in seven years. The S&P 500 and Dow are now down for the year again. The fall has erased all remaining gains made by the market in 2018.

While U.S. economic growth kept apace despite trade wars, the same can not be said of U.S. corporate profit growth, as a slew of disappointing forecasts this earnings season showed how tariffs, rising wages and borrowing costs as well as jitters over geopolitical events are hurting companies.

Stocks have been shaky for weeks as investors have anxious about global growth, potential impacts from trade disputes, and the Fed's determination to raise interest rates. -China trading dispute could hurt the economy and dampen corporate earnings growth.

The weak results from Amazon and Google parent Alphabet were the latest setback for the high-growth quartet of stocks known as FANG, which also includes Facebook Inc (FB.O) and Netflix Inc (NFLX.O).

The Shanghai Composite index slipped 1.6 per cent to 2,561.36 and Hong Kong's Hang Seng index skidded 1.8 per cent to 24,785.68.

On Wednesday, key Wall Street indexes sank by more than 2 percent, further extending losses seen just the day before.

The Nasdaq registered its biggest daily percentage gain since March 26. Japanese telecoms and energy giant Softbank lost 4.1 percent.

Those anxieties were compounded after investors reacted badly to earnings reports from Caterpillar and 3M, two industrial giants that are Dow components and considered vulnerable to a global economic slowdown and the US-China trade clash.

That, along with worries ranging from rising borrowing costs and bond yields to Italy's budget and upcoming USA mid-term elections, sparked a rout on Wall Street yesterday.

On Wednesday, data showed sales of new US single-family homes fell to a near two-year low in September, the latest sign that rising mortgage rates and higher prices were hurting demand for housing.

Benchmark U.S. crude lost 6 cents to $66.76 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the benchmark for worldwide oil prices, dropped 0.5 per cent to $76.52 a barrel in London.

Wholesale gasoline gained 0.1 percent to $1.82 a gallon.

Twitter soared 15.7 percent to $31.87 and electric auto maker Tesla jumped 8.7 percent to $313.62 after releasing their quarterly reports, while video game maker Take-Two vaulted 9.1 percent to $121.05 after strong reviews for its latest game, "Red Dead Redemption 2".

The dollar climbed to 112.59 yen from 112.44 yen. The euro fell to $1.1393 from $1.1467. Silver dropped 0.8 percent to $14.68 an ounce.

A bear market is one where stock prices decline at least 20 percent from their recent peak. Britain's FTSE 100 slid 1.3 percent. Experts think the country's gross domestic product grew 3.3 percent from July to September, according to FactSet. Australia's S&P/ASX 200 was flat.

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