Sunday, 21 October, 2018

Wall Street dives, setting the ASX up for heavy losses at open

New York City. With bond prices dropping interest rates have been surging resulting in the Dow Jones Industrials Average falling over 200 poin Dow Falls 430 Points as Bond Yields Surge and China Tensions Grow Spencer Platt Getty Images10 Oct 2018
Ginger Lawrence | 11 October, 2018, 02:00

Tech stocks in the S&P 500 fell 2.5 percent Wednesday for the steepest loss among the 11 sectors that make up the index.

Back in late January and early February, there was a 10-per-cent correction in the S&P 500, with stock investors spooked as Treasury yield increases intensified with a monthly payrolls report showing the biggest wage gains for workers since 2009.

Wednesday started off gloomy and just got worse for stocks.

Some of America's biggest tech stocks were caught up in the sell-off, with Netflix down 8%, Microsoft sliding 5%, Amazon off by 6% and Google's parent company Alphabet down 5%. Technology companies were among the losers, with the Nasdaq Composite dropping more than 2% to 7,575.34.

"The market is digesting the potential that rates moving upwards eventually seep into the real economy in the form of mortgage rates, auto rates, student lending rates", Mahajan said.

Today technology stocks saw their worst overall day since 2011 as investors concerns continue to mount over rising interest rates. It was more than US$40 five years ago.

USA long-dated Treasury yields rose again in extension of a trend over the last few weeks fueled by solid US economic data that reinforced expectations of multiple interest rate hikes over the next 12 months.

Benchmark US crude oil fell 2.4 per cent to US$73.17 a barrel in NY.

Court: Doctor in Spain abducted newborn 49 years ago
During the trial, Vela said he could not remember details about the operation of the clinic, which he ran for 20 years up to 1982. The policeman said Vela was part of a "plot" to take babies from single mothers in shelters often run by religious orders.

Earnings were a major driver of the market last quarter, and analysts see more robust results ahead, even if companies face growing issues like the yet-to-be-resolved trade war and higher raw-materials costs.

The 10-year yield is now 3.20 percent, the highest in than seven years and up sharply form 2.82 percent in late August. It was at just 3.05% early last week. Brent crude, the worldwide standard, lost 65 cents to $84.35. The Nasdaq composite fell 152 points, or 2 percent, to 7,585.

Wholesale gasoline shed 2.7 percent to $2.02 a gallon. A move of more than two deviations, or 40 basis points now, leads to negative S&P 500 returns, Goldman says.

In further evidence that stocks can rally despite rising Treasury yields, LPL Research found that in all 12 periods of rising 10-year yields since 1996, the S&P 500 ended the period higher than it began, according to senior market strategist Ryan Detrick. United States gold futures settled up $1.9, or 0.16 percent, at $1,193.4. Silver dipped 0.5 percent to $14.33 an ounce.

Japan's Nikkei 225 added 0.2 percent, South Korea's Kospi dropped 1.1 percent and the Hang Seng in Hong Kong gained 0.1 percent.

The CAC 40 in France dropped 2.1 per cent, Germany's DAX lost 2.2 per cent and the FTSE 100 in London fell 1.3 per cent.

Investors sold off U.S. government bonds, with the two-year yield touching its highest point since June 2008.

Stocks from emerging markets were also hard hit. Brazil's Bovespa lost 2.5 per cent and the Merval in Argentina sank 2.2 per cent. The British pound rose to $1.3197 from $1.3146.