Dow plummets 800 points, biggest drop in 8 months

AP  File		The interior of the New York Stock Exchange

The Dow plunged almost 832 points on Wednesday, the third-worst point decline in history. The index fell by more than 3%. The S&P 500 sank 2.3 percent, marking its sixth day of decline.

Wednesday marked the largest single-day decline in the Dow Jones since February 8, when it fell 1,032 points to close at 23,860.

Worldwide markets followed the downward trend.

The bull market that began in 2009 soon after the Federal Reserve, European Central Bank and the Bank of Japan added more liquidity with their historically low-interest rates and bond purchases began to lose shine after the Fed increased fund rates three times in a year. The Nasdaq has fallen almost 8 percent.

The broad-based S&P 500 slumped 3.3 percent to end at 2,786.46, while the tech-rich Nasdaq Composite Index plummeted 4.0 percent to finish the session at 7,427.74. The Dow's percentage decline doesn't crack the top percentage declines. The index didn't reach 700 again until 1987.

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.

Mona Mahajan, US investment strategist at Allianz Global Investors, said: "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".

The price of the bond with the lower interest rate, known as its coupon, will fall enough to raise the yield to mirror the higher rate.

Investors may want to shift out of momentum and into more defensive stocks - companies that aren't as expensive and also pay healthy, stable dividends.

Luxury stocks were another casualty of worries of slowing China demand, sparked by LVMH's results.

USA airlines were another big loser, with American Airlines sliding 4.1% and Southwest Airlines 3.8% as a major U.S. hurricane caused flight cancellations in Florida.

China says accusations against alleged spy 'out of thin air'
Demers said its assistance was crucial to the investigation. "We will not tolerate a nation that reaps what it does not sow". It has broad powers to conduct espionage domestically and overseas , the statement said.

But there were few places to hide Wednesday.

All top ten cryptocurrencies and stocks from Dow Jones, S&P 500 and Nasdaq, are in the red on Thursday. That didn't happen Wednesday as stocks fell further late in the day.

Some of the big losers were stocks that have scored double-digits gains earlier in 2018.

Volatility has returned with a vengeance.

Wall Street's troubles caused turmoil in global markets overnight.

Other markets shadowed the Dow. It was showing signs of Greed just a month ago.

"The selloff is healthy", Heider said.

All three indexes hit records between August 30 and October 3, despite the escalating Sino-US trade dispute gnawing at confidence on corporate profit growth through most of the year.

Tech stocks declined due to rising bond yields, which followed a spike in rates for the benchmark U.S. 10-Year Treasury. This slide was long overdue.

Monthly inflation numbers are out in the US. "But this nothing to be overly concerned about", Alexander said.

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