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Thread: Top stories BREAKING Dow falls 800 points, tech stocks hit hardest

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  1. #1
    Senior Member JohnDoe2's Avatar
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    Top stories BREAKING Dow falls 800 points, tech stocks hit hardest

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    • BREAKING Dow falls 800 points, tech stocks hit hardest


      Dow falls 832 points in third-worst day by points ever

      By Paul R. La Monica, CNN Business
      Updated 5:14 PM ET, Wed October 10, 2018

      New York (CNN Business)The Dow plunged nearly 832 points on Wednesday, the third-worst point decline in history.

      All 30 Dow stocks were in the red, sending the index below 26,000 points for the first time in a month. The index fell by more than 3%.
    • The S&P 500 posted its fifth straight decline, plummeting nearly 3.3%. And tech stocks got hit particularly hard. The Nasdaq dropped more than 4% in the worst percentage decline since June 2016.
    • Stocks are in the midst of a scary October slump, sliding sharply because investors are worried about rising interest rates.

      October has often been a nerve-racking month for investors, and this month is living up to that reputation. All three indexes are in the red this month. But the Nasdaq has really taken it on the chin: It has plunged nearly 8% already in October.

      The Dow's point decline was the worst since February, when the index fell by more than 1,000 -- twice. The Dow's percentage decline doesn't crack the top percentage declines. The index fell 23% in 1914 and on "Black Monday" in 1987.
      The Technology Select Sector SPDR Fund, a proxy for the tech sector, plunged 4.85%. That hadn't happened since August 2011.
    • Why stocks are plunging

      Tech is taking its lumps because bond yields have climbed in recent weeks, hovering at a more-than-seven-year high.
    • Although that's largely because the US economy is so strong, the spike in rates for the benchmark US 10-Year Treasury has investors wondering if the near-decade-old bull market may finally be ending.



      Higher long-term rates could slow down red hot sectors of the economy, including technology, especially as the Federal Reserve seems intent on raising short-term rates for the foreseeable future. Higher rates increase borrowing costs, pinching corporate profits.
    • Investors may want to shift out of momentum and into more defensive stocks -- companies that aren't as expensive and also pay healthy, stable dividends.
    • Continued worries about a slowdown in China's economy -- especially as trade tension with the United States has escalated -- were also dragging down the broader market.
    • Who's up and who's down

      Tech leaders Amazon (AMZN), Facebook (FB) and Netflix (NFLX) all helped lead the market lower Wednesday while stodgier companies like food companies Smucker (SJM) and General Mills (GIS), gold miner Newmont (NEM) and bargain retailers Dollar General (DG) and Dollar Tree (DLTR) finished the day higher.
      But there were few places to hide Wednesday. Only 17 stocks in the S&P 500 wound up with a gain. Even utility stocks, which tend to pay big dividends, fell slightly Wednesday.
    • Apple (AAPL), Boeing (BA), Caterpillar (CAT) and Nike (NKE) -- Dow stocks that all have a significant presence in China -- were among the bigger blue chip losers on Wednesday.
    • Volatility has returned with a vengeance.
    • The CBOE Volatility Index, or VIX, a market barometer often dubbed Wall Street's fear gauge, surged nearly 40%.
      And the CNNBusiness Fear & Greed Index, which looks at the VIX and several other indicators of market sentiment, plunged into Extreme Fear mode. It was showing signs of Greed just a month ago.
    • What to do when the market turns south

      Some experts said this isn't a time to panic.
    • The pullback -- particularly for tech stocks -- is needed, argued Joe Heider, president of Cirrus Wealth Management.
      "The selloff is healthy," Heider said. "Since the market bottomed in March 2009, it's been more than 10 years of growth stocks leading the way non-stop."
    • Investors were "selling first and asking questions later," said John Augustine, chief investment officer with Huntington Private Bank.
    • Augustine added that with earnings due out from big banks JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) on Friday morning, investors will look for new market sectors to take the lead from tech stocks. In theory, banks should do better if the Fed keeps raising interest rates and bond yields climb higher since it will make their loans more profitable.
    • And Geoff Alexander, the president of R. M. Davis, a wealth management firm, said he wasn't getting too nervous about Wednesday's market madness either.
    • As long as earnings and the US economy are continuing to grow, this market pullback will wind up being a healthy dip Alexander said. The relative lack of volatility was a bit troubling. This slide was long overdue.
    • "We've scratched our heads about the rise in stocks for the past 18 months. But this nothing to be overly concerned about," Alexander said.




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  2. #2
    Senior Member Judy's Avatar
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    Bring your manufacturing operations back home where they belong and it won't matter what's going on in China. GET IT?? COME HOME!!

    It's a wonderful thing when the economy is so strong, there's upward movement in wages that causes CRAZY FEDS to freak out to control "inflation" and then send Wall Street on the run chasing higher interest rates!!!

    KEEP THE GOOD TIMES ROLLIN'. DON'T GIVE UP. DON'T BACK DOWN. VOTE ALL REPUBLICAN IN NOVEMBER 2018!!!!
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    Senior Member Beezer's Avatar
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    Good day to buy and get back in!!!!

    VOTE RED...REAP THE REWARDS!
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    Senior Member Judy's Avatar
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    Yes, don't freak out over the Crazy Fed!!
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    Senior Member JohnDoe2's Avatar
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    Global stock markets crashed and Trump may be to blame - Vox
    https://www.vox.com/world/2018/10/.....w-china-europe

    21 mins ago - Global markets just tanked — and Trump may be partially to blame. A massive Wall Street drop led to downturns in the European and Asian stock markets. ... has placed about $200 billion worth of tariffs on Chinese goods.
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    Senior Member Beezer's Avatar
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    It's the FOURTH QUARTER and historically it always drops.

    Fourth Quarter is typically not as high as it has been.

    Companies dump stock in 4th quarter and pay debts.
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    Senior Member Judy's Avatar
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    The bond yields are really good right now after the Fed raised rates again, so a lot of the institutional investors are selling stocks, taking profits, and investing the profits in all win, no risk, easy money Treasuries to increase their cash earnings in the next few months from those short-term Treasury Bonds. It's just a natural reaction and conversion to take advantage of the higher interest rates.
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    Senior Member JohnDoe2's Avatar
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    Broken correlation between stocks and bonds is taking risk to 20-year highs, analyst Nick Colas warns

    Stephanie Landsman | @stephlandsman
    Published 6 Hours AgoCNBC.com

    A key relationship between stocks and bonds is breaking down, analyst Nick Colas warns 23 Hours Ago | 01:55


    Stock market investors may be facing a game changer.
    According to DataTrek co-founder Nick Colas, a key relationship between stocks and bonds has broken down, and it could greatly hurt nest eggs.

    His latest research shows that the two assets became positively correlated in September, a trend that's rarely been seen over the past two decades.




    "A lot of portfolios over the last 20 years have gotten built on the notion that when stocks go down, bonds go up," he said Wednesday on CNBC's "Trading Nation." "It has stopped working this year."


    Due to the breakdown, Colas warns that bonds will not be a viable shock absorber for diversified investors for the foreseeable future.


    "The upshot is we're going to be looking for a lot more volatility in balanced portfolios, and investors will feel a lot more volatility than they have historically," Colas said.


    Volatility, indeed.

    The major indexes tumbled Wednesday. The S&P 500 and Dow fell more than 3 percent for their worst day on a percentage basis since Feb. 8. The Nasdaq plummeted 4 percent for its worst day since June 24, 2016. The Cboe Volatility Index, which measures volatility, surged above 20 for the first time since April.


    Yet, Colas doesn't believe the latest activity is the death knell for the record stock market rally. Despite the correlation and uptick in volatility, he's not calling for a prolonged deep sell-off or recession to hit the U.S. over at least the next 15 months.


    However, a big question remains. Can investors stomach the ride?


    "Investors will feel a lot more risk than they have over the last two decades. It's a very important change from the last 20 years," Colas said.


    He sees two options that could mitigate the effects of the broken correlation.


    "Reduce the length of the bonds that you own. So, shorten duration," Colas said. "The second choice is just use cash as your bond allocation for a while. You're getting 1.50 to 2 percent in cash."

    https://www.cnbc.com/2018/10/11/a-br...las-warns.html

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