Published: Mon, October 29, 2018
Money | By Wilma Wheeler

Markets Right Now: US stock indexes surge a day after a rout

Markets Right Now: US stock indexes surge a day after a rout

Steep drops in favorites like Amazon pulled the market sharply lower Friday, capping an unusually turbulent week of trading.

On today the stock market looked the way it has looked for most of this year: high-tech and consumer-focused companies lead the way while steadier, defensive stocks that pay big dividends weren't doing much, or lost ground. Bond prices rose, sending yields lower, as investors continued to seek less risky assets.

The S&P 500 shrunk by nearly 47 points or about 1.73% while the Nasdaq Composite Index lost slightly over 2%, dropping over 150 points. The index is now off about 9.4 percent from its September 20 peak. The last S&P 500 correction happened in February.

NY trading overnight saw the Nasdaq composite with its hefty roster of tech stocks bear the brunt of the sell-off.

Asian stock markets opened in the red on Thursday, a day after technology stocks hit Wall Street with the largest daily decline since 2011 and wiped out all of this year's gains.

The S&P 500 index rose 49 points, or 1.9 percent, to 2,705. The ups and downs came during the busiest week for third-quarter company earnings. "That's causing some of this volatility".

Earlier on Thursday, all four FANG stocks rallied by between 3 and 7 percent, regaining some of the territory lost in recent weeks during a broad market selloff.

The S&P 500 index jumped 49.47 points, or 1.9 percent, to 2,705.57. The average was briefly down more than 500 points.

The tech-heavy Nasdaq composite lost 151.12 points, or 2.1 percent, to 7,167.21.

The Nasdaq is up 263.82 points, or 3.8 percent.

Stocks are off to a mixed start on Wall Street as gains for Boeing and other industrial companies are offset by losses elsewhere in the market.

While economic growth is mostly healthy, disappointing corporate results and forecasts this earnings season have shown how tariffs, rising wages and borrowing costs as well as jitters over geopolitical events are hurting companies.

Rising rates and the trade dispute could both impair economic growth, and some encouraging economic news helped stabilize markets.

Volatility in US markets has weighed on Asia for some time as trade tensions between the USA and China heighten.

"There's still uncertainty facing equity investors", said Gary Pollack, managing director at Deutsche Bank Wealth Management.

Ford Motor, which is struggling with sales in China, surged 7.4 percent as its earnings report raised hopes for a strong finish to the year, while Raytheon was up 1.2 percent after the United States defence contractor raised its full-year forecast.

Reacting after hours, Netflix dipped 3 percent and Facebook, which reports results on October 30, lost 2.3 percent.

Amazon slumped 8.6 percent and Google's parent company, Alphabet, gave back 3.8 percent.

Elsewhere in Asia, South Korea's Kospi fell 2 percent to 2,053.75 and the S&P ASX/200 dropped 2.2 percent to 5,701.80.

The Commerce Department said sales of new USA homes plunged 5.5 percent in September, the fourth monthly drop.

In a bright spot, chipmaker Intel gained 3.1 percent to $45.69 after it reported strong quarterly results and raised its outlook.

Despite the tumbling stock prices, the US economy looks solid.

The 30-stock index rose 71 points, or 0.3 percent, to 25,259. On Wednesday it edged up 0.6 per cent Brent crude, used to price worldwide oils, gained 4 cents to $76.21 a barrel. The Nasdaq (.IXIC) jumped 2.95 percent, but remained down 10 percent from its August record high close.

The dollar weakened to 112.44 yen from 112.47 yen on Tuesday. The euro rose to $1.1408 from $1.1393. It's fallen 13.5 percent since the end of August and is down 2 percent so far this year.

With news emerging that the pace of the country's economy had slightly slackened in the third quarter of 2018 (ending September), analysts stated that the reason for this fluctuation in the stock market was because of the upcoming mid-term elections in the US, on Tuesday, November 6th.

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