US stocks seemed as though they were free falling in trading on Wednesday as Wall Street was slammed. The Dow erased earlier gains as Boeing reported before the market open with positive results that helped the stock finish higher by 1.47%. The Dow tumbled by more than 600 points falling 2.41%, the S&P 500 fell 3.09% and the Nasdaq declined 4.43% taking the largest hit and officially falling into correction territory.
Yet despite Boeing’s earnings beat, investors turned their attention to global issues - The possibility of a trade war, the Fed’s tightening of monetary policy through hiking rates, a slowdown in the Chinese economy, poor housing data and in breaking news the attempted attacks on Democratic officials as explosive devices were sent in the mail.
Starting with the positive, the S&P 500 Utilities sector rose 2.43% as investors fled to more defensive stocks – on the Dow Procter and Gamble shares rose 2.6%, being the best performer. In companies reporting after the close, Tesla shares are up 12% after delivering a quarterly profit for the first time, Microsoft +1.77%, and Visa +1.67%. Companies disappointing and extending losses incurred during the trading session, Advanced Micro Devices shares have plunged 22.11% after falling 9.17% and Align Technology shares fell 21.41% after falling 6.69%.
Worries about a slowing economy from higher interest rates have continued to put pressure on the housing stocks, combined with comments from the Commerce Department that new home sales have fallen to a two year low. The SPDR S&P Homebuilders ETF (XHB) dropped 3.5 percent and Toll Brothers shares fell 4.36% and Lennar Corp shares fell 4.57%. Moving into the banking sector, bank shares fell on the back of fears of slowing growth for mortgage and other loans. The SPDR S&P Bank ETF (KBE) dropped 4.1 percent and related stocks – Bank of America shares fell 3.07% and Goldman Sachs declined 4.29%.
It’s also worth mentioning the dominant stocks in the market, share with the larger market caps fell heavily – Google shares fell 5.18%, Amazon shares fell 5.91%, Microsoft shares fell 5.35%, Apple shares fell 3.43%.
In the currency markets, the US dollar rose after sluggish European data indicated about economic growth in the region. The dollar index rose 0.54% to 64.438 whilst the Japanese Yen strengthened to 112.23. The euro fell as much as 0.8% last at $1.139 and sterling hit a six week low of $1.287. Oil Prices rebounded after a slump in the previous session as Light Sweet Crude rose 39 cents to settle at $66.82.
- European Central Bank Rate Decision at 10:45pm (ADT)
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