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Wall Street dropped as investors continued to shun risky investments


Devdiscourse News Desk United States
Updated: 12-10-2018 07:25 IST
Wall Street dropped as investors continued to shun risky investments

Wall Street dropped on Thursday as investors continued to shun risky investments, but the decline was less severe than the brutal sell-off in the previous session as a bounce in some high-growth technology stocks helped limit losses.(Image Credit: Twitter)

Wall Street dropped on Thursday as investors continued to shun risky investments, but the decline was less severe than the brutal sell-off in the previous session as a bounce in some high-growth technology stocks helped limit losses.

Energy stocks, pressured by a drop in oil prices, and financials, with insurers hit by worries over the impact of Hurricane Michael, led the losses.

But the technology sector, which led the sell-off on Wednesday, gained 0.46 per cent. Microsoft rose 1.4 per cent, while chipmakers such as Micron and AMD led the gainers among tech stocks.

"The environment is still risk-off, tech stocks seem to have stabilized but haven't quite bounced back yet," said Lamar Villere, portfolio manager at Villere Balanced Fund in New Orleans.

"Investors are still nervous, but things seem to have calmed a bit. This certainly doesn't seem as bad as yesterday."

The communication services sector rose 0.49 per cent, as Facebook and Alphabet both rose 1.4 per cent.

"The growth stocks, which are the path leaders, typically bounce from the bottom first," said Tom Plumb, portfolio manager of the Plumb Balanced Fund in Wisconsin.

The stock market is caught in the backdrop of a storm of worries: the impact of trade tensions on corporate profits to Treasury yields at multi-year highs and hawkish comments from Federal Reserve officials. That culminated Wall Street's biggest sell-off in eight months on Wednesday.

On Thursday, a smaller-than-anticipated rise in consumer prices eased some fears of inflation pressures rising, but did little to change expectations of the Federal Reserve to raise interest rates in December.

The indexes fell below key technical levels, the S&P and the Nasdaq dropped below their 200-day moving average prices and the Dow slipped below its 100-day moving average before the slide eased.

At 1:25 p.m. ET the Dow Jones Industrial Average was down 114.81 points, or 0.45 per cent, at 25,483.93, the S&P 500 was down 14.95 points, or 0.54 per cent, at 2,770.73 and the Nasdaq Composite was up 14.73 points, or 0.20 per cent, at 7,436.78.

Energy stocks fell 1.59 per cent as oil prices hit two-week lows after an industry report showed U.S. crude inventories rose more than expected.

The defensive utilities and real estate sectors were both down around 1 per cent, as were the health and financial sectors.

JPMorgan Chase, Citigroup and Wells Fargo, which report quarterly results on Friday, were down between 0.05 per cent and 1.8 per cent.

Property insurers Prudential Financial, Chubb and AIG fell between 2.6 per cent and 3.2 per cent on concerns that Hurricane Michael would drive up their catastrophe losses.

Declining issues outnumbered advancers for a 1.78-to-1 ratio on the NYSE and a 1.15-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 47 new lows, while the Nasdaq recorded five new highs and 212 new lows.

(With inputs from agencies.)

COUNTRY : United States

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