Published: Sat, October 27, 2018
Finance | By Jaime Brady

Stocks shudder on Wall Street following steep drops overseas

Stocks shudder on Wall Street following steep drops overseas

The Dow and S&P 500 erased their gains for the year.

The Dow Jones Industrial Average fell 608.15 points, or 2.41 per cent, to 24,583.28, the S&P 500 lost 84.53 points, or 3.08 per cent, to 2,656.16 and the Nasdaq Composite dropped 329.14 points, or 4.43 per cent, to 7,108.40.

The Dow Jones Industrial Average plunged more than 450 points in early trading.

Headline indices of the Australia market stumbled on Thursday, 25 October 2018, as risk-off mood dominated on tracking Wall Street's overnight slide which fell amid nervousness around US corporate earnings and geopolitical uncertainty added to heightened worries about global growth, Italy's free spending budget and Sino-US trade tensions.

Technology stocks and media and communications companies accounted for much of the selling.

"It looks like more panic and fear as the selling has continued to roll", said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance based in Charlotte, North Carolina.

On the futures markets, the ASX futures are pointing to a 73 points gain.

"There has definitely been a change in sentiment for investors starting with the volatility we had last week".

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The Australian dollar is steady at 70.8 United States cents.

"The sentiment and the outlook seems to be turning more negative, or at the very least, less rosy". Texas Instruments, a major chipmaker, slumped 8.2 per cent and AT&T fell 8.1 per cent.

The dive in formerly high-flying tech stocks sent investors scampering to the safety of sovereign bonds, with yields in 10-year Treasuries falling the most since May to 3.11 percent. The S&P 500 index was down 49.05 points at 2,706.83, while the Nasdaq composite was down 160.22 points at 7,308.41.

Shares of Qantas Airways fell nearly 4% after the company eported a 6.3% increase in first-quarter revenue, reflecting a jump in forward bookings and higher airfares that helped offset rising fuel costs. Amazon released their third quarter results after the U.S. market closes - with revenue below expectations.

Markets have been rattled in recent weeks by increased worries over the impact that rising interest rates, inflation and the escalating trade dispute between the US and China may have on Corporate America. Alphabet also just reported its Q3 2018 results, with earnings of $33.74 billion - up 21 per cent from the same quarter previous year but not beating expectations.

Boeing jumped 2.2 per cent in early trading Wednesday after beating analysts' earnings forecasts and raising its estimates for the year, citing faster orders for aircraft.

The results offered hope to Wall Street, battered this week by a series of sluggish outlooks from manufacturers and chipmakers anxious about the impact of tariffs, a slowdown in China on profits and global growth. Even the dollar eased to 112.08 yen.

Benchmark U.S. crude fell 4.4 percent to $66.33 per barrel in NY. The euro rose to $1.1486 from $1.1466.

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