Published: Fri, October 12, 2018
Markets | By Noel Gibbs

Stocks plunge again on wide selling; Dow down as much as 698

Stocks plunge again on wide selling; Dow down as much as 698

The tech sector was hit hardest, with Netflix down almost 7 per cent, Amazon down 5 per cent and Apple, Google and Facebook all down more than 3 per cent. The CBOE Volatility Index, widely considered a fear gauge for the market, rose to 24.1 points on Thursday morning, a fresh six-month high.

United States stocks are tumbling for a second straight day, with the Dow Jones industrials falling as much as 2.5 per cent and the benchmark S&P 500 suffering a similar decline.

Gina Martin Adams, the chief equity strategist for Bloomberg Intelligence, said investors are concerned about the big increase in yields, which makes it more expensive to borrow money.

The rise in U.S. Treasury yields has been bolstered by good U.S. economic data that has reinforced expectations of multiple rate hikes over the next 12 months by the Federal Reserve. Concerns about consumer spending have also led to jitters about U.S. companies as they prepare to unveil results for the third quarter of the year over the coming weeks. It's fallen 6.3 per cent over the last five days.

USA crude fell 1.98 per cent to $71.72 per barrel and Brent was last at $81.30, down 2.15 per cent on the day. Snap, the parent company of the messaging app Snapchat, fell 4.8pc and sank to a new all-time low.

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The sharp decline in stocks was led by a fall in shares across several of the world's largest technology giants. Investors see many of these countries as being vulnerable to higher USA interest rates, which can pull away investment dollars. Chip gear producers Applied Materials, Teradyne and ASML Holdings fell between 3.5 percent and 4.6 percent. Over the past two days, it has lost more than 1,300 points.

"If investors are going to take profits then it will be from some of the bigger, high-growth names", Nauman said.

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. Sears has closed hundreds of stores and sold several famous brands or put them on the block as it sees more customers abandon its stores.

US crude dropped 3 percent while Brent crude, the global standard, dropped 3.4 percent.

Although the yield on the 10-year Treasury declined toward the end of the day, its jump from 3.05 percent early last week to more than 3.20 percent - a seven-year high - has spooked investors. Brent crude, the worldwide standard, lost 2.2 per cent to $83.09 a barrel in London.

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The dollar index fell 0.31 per cent, with the euro up 0.4 per cent to $1.1564. Australia's S&P/ASX 200 slipped 2.4 percent to 5,906.00. Natural gas rose 0.6 per cent to $3.28 per 1,000 cubic feet.

The Japanese yen strengthened 0.01 per cent versus the greenback at 112.29.

The tech-heavy TWSE index in Taiwan plummeted 6.3 percent, while Japan's Nikkei slid almost 4 percent and the South Korean KOSPI index dropped 4.4 percent as foreign investors pulled out.

The euro and sterling rose, underpinned by optimism for a Brexit deal, while the USA dollar lost ground against a basket of currencies even as US yields hovered near multiyear peaks.

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