Dow Industrials Sink 831 Points as Tech Companies Plunge - NBC Bay Area
National & International News
The day’s top national and international news

Dow Industrials Sink 831 Points as Tech Companies Plunge

Apple and Amazon both had their worst day in two and a half years

    processing...

    NEWSLETTERS

    The Dos and Don'ts of Good Sleep
    AP
    Screens above trading posts on the floor of the New York Stock Exchange, Tuesday, Aug. 21, 2018.

    U.S. stocks plunged Wednesday as investors, fearful that rising interest rates and trade tensions could hurt company profits, ramped up their selling of high-flying technology and internet stocks. The Dow Jones Industrial Average fell 831 points, its worst loss in eight months.

    The losses were widespread, and stocks that have been the biggest winners on the market suffered steep declines. Apple and Amazon, the two most valuable companies in the S&P 500, each had their worst day in two and a half years.

    The Nasdaq composite, which has a high concentration of technology companies, sustained its biggest loss in more than two years and has dropped almost 8 percent since the start of October.

    Wednesday's drop should be placed in perspective. Since early 2009, the S&P 500 has quadrupled, driven higher by the U.S. economic expansion, hefty profits for corporations and historically low interest rates, all of which makes stocks an attractive investment.

    Dow Jones Industrial Average Largest Daily Point Loss

    DateClosePoints change% Change
    May 13, 201925,324.99617.38−2.38
    Dec. 24, 201821,792.2−653.17−2.9
    Feb. 5, 201824,345.75−1,175.21−4.60
    Oct. 10, 201824,345.75−831.3−3.20
    Dec. 4, 201825,027.07−799.36−3.10
    Sep. 29, 200810,365.45−777.68−6.98
    Oct. 15, 20088,577.91−733.08−7.87
    Sep. 17, 20018,920.70−684.81−7.13
    Dec. 1, 20088,149.09−679.95−7.70
    Oct. 9, 20088,579.19−678.91−7.33
    Feb. 2, 201825,520.96−665.75−2.54
    Aug. 8, 201110,809.85−634.76−5.55
    Apr. 14, 200010,305.78−617.77−5.66

    Data source: Measuring Worth, NBC Staff Reports

    But stocks have slumped over the last week, largely due to worries over rising interest rates. The Federal Reserve recently raised short-term interest rates for the third time this year. Strong economic data and a positive outlook from Fed officials last week sent bond yields sharply higher and sparked concerns about even higher interest rates.

    Big moves in interest rates tend to unsettle investors, and they can also push them to sell stocks and buy bonds instead. And there is still an overhang from the U.S. trade dispute with China, which accounts for sizeable portions of some tech companies' revenue.

    Alec Young, managing director of global markets research at FTSE Russell, said investors fear that rising interest rates and growing expenses are going to erode the boost company profits have gotten from the GOP tax overhaul.

    No Religious Exemptions for Measles Vaccines

    [NATL] No Religious Exemptions for Measles Vaccines

    A new law signed by New York Governor Andrew Cuomo Thursday ends religious exemptions for vaccinations for school children.

     
    The move comes as New York battles its worst measles outbreak in decades.
    (Published Friday, June 14, 2019)

    "The tax cuts juiced earnings this year and that's not sustainable," he said. "The market's starting to say that the glass may be half empty."

    President Donald Trump reiterated those concerns Wednesday. Trump told reporters after landing in Erie, Pennsylvania, for a campaign rally that he believes the Fed "is making a mistake" with its campaign of rate increases.

    "I think the Fed has gone crazy," he said.

    At the same time, Trump called Wednesday's market plunge "a correction we've been waiting for for a long time."

    The Dow Jones Industrial Average gave up 831.83 points, or 3.1 percent, to 25,598.74. The S&P 500 index sank 94.66 points, or 3.3 percent, to 2,785.68. The benchmark index fell for the fifth straight day, which hadn't happened since just before the 2016 presidential election.

    The Nasdaq composite, with a large contingent of tech stocks, tumbled 315.97 points, or 4.1 percent, to 7,422.05. It's fallen 7.5 percent in just five days.

    US Blames Iran for Attacks to Oil Tankers

    [NATL] U.S. Blames Iran for Attacks to Oil Tankers

    Tensions intensified this week after the U.S. blamed Iran for a suspected attack on oil tankers, one of which was set ablaze, near the strategic Strait of Hormuz.

    (Published Thursday, June 13, 2019)

    The Russell 2000 index of smaller-company stocks shed 46.45 points, or 2.9 percent, to 1,575.41.

    The market had enjoyed a stretch of relative calm, where even big intraday losses were erased by the end of the day. But over the past five days, the losses stuck, and on Wednesday the selling went on right to the closing bell.

    Some of the big losers were stocks that have scored double-digits gains earlier in 2018. Apple gave up 4.6 percent to $216.36 and Microsoft dropped 5.4 percent to $106.16. Amazon skidded 6.2 percent to $1,755.25 and Alphabet, Google's parent company, gave up 4.6 percent to $1,092.16.

    Mother of 5 Slain Kids Asks Jury to Spare Ex-Husband's Life

    [NATL] Mother of 5 Slain Kids Asks Jury to Spare Ex-Husband From Death Penalty

    Amber Kyzer stunned a South Carolina courtroom after she asked the jury to spare their murderer, her ex-husband Timothy Jones Jr., the death penalty, despite Jones having killed their five children.

    (Published Wednesday, June 12, 2019)

    Amazon has soared 50 percent this year, but has fallen 14 percent from its all-time high in early September. Alphabet has dropped 15 percent since late July.

    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. The yield was just 2.82 percent in last August.

    The Federal Reserve has been gradually raising interest rates for more than two years as the U.S. economy grows. When yields rise for that reason, it is generally good for stocks. But eventually the high rates worry stock investors, as higher rates tend to increase borrowing costs and cut into profit margins. They also make bonds more attractive investments.

    Body Cameras Capture Controversial Police Punch

    [NATL] Body Cameras Capture Controversial Police Punch

    Video showing a Columbus, Ohio, police officer punching a man went viral over the weekend. On Monday, the Columbus Division of Police released body worn camera video showing the incident. In the video you can see a woman who claims to be the man’s mother visibly upset with officers while recording the incident on Facebook live. Another woman then approaches officers with two children in her arms. Officer ask her to step back away from the house. A man is seen then approaching police. Officer AJ Johnson exchanges words with the man. Seconds later officer Johnson is seen hitting him.

    (Published Wednesday, June 12, 2019)

    There is some concern among investors that the Fed could overreact to the strong economy — it grew at a robust annual rate of 4.2 percent in the second quarter — and ramp up rate hikes and prematurely put the brakes on growth.

    Technology and internet-based companies are known for their high profit margins, and many have reported explosive growth in recent years, with corresponding gains in their stock prices.

    Gina Martin Adams, chief equity strategist for Bloomberg Intelligence, said the stocks have become more volatile in the last few months because investors have concerns about their future profitability.

    US Women Set Records in 13-0 World Cup Win

    [NATL] US Women Set Records in 13-0 World Cup Win

    The U.S. Women's National Team beat Thailand 13-0 in their opening match of group play in the 2019 World Cup in France.

    (Published Tuesday, June 11, 2019)

    "Amazon recently announced they were increasing wages, Facebook is spending a ton on security," she said. "Semiconductors have the most exposure to China out of segments in the S&P 500."

    Sears nosedived after the Wall Street Journal reported that the struggling retailer hired an advisory firm to prepare a bankruptcy filing that could come within days. The stock fell 16.8 percent to 49 cents. It was more than $40 five years ago.

    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.

    Vatican Rejects Idea That Gender Can Change

    [NATL] Vatican Rejects Idea That Gender Can Change

    In the middle of LGBT Pride Month Monday, the Vatican issued an official document denying the idea that people can choose or change their gender after birth. The document was immediately denounced by LGBT Catholics as contributing to bigotry and violence against the LGBT community.

    (Published Tuesday, June 11, 2019)

    Insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 miles an hour. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.

    Luxury retailers tumbled after LVMH, the parent of Louis Vuitton, said its sales growth in China slowed. Tiffany plunged 10.2 percent to $110.38 and Ralph Lauren fell 8.4 percent to $116.96.

    Stocks from emerging markets were also hard hit. Investors see many of these countries as being vulnerable to higher U.S. interest rates, which can pull away investment dollars. Brazil's Bovespa lost 2.5 percent and the Merval in Argentina sank 2.2 percent.