Wall Street plunges as Dow erases 2018's gains

February 06, 2018 | 12:33
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Wall Street stocks endured a brutal session on Monday (Feb 5), with the Dow seeing one of its steepest ever one-day point drops, as the heady bullishness of early 2018 gave way to extreme volatility.
wall street plunges as dow erases 2018s gains
Traders work on the floor of the New York Stock Exchange. (Photo source: AP/Richard Drew)

The Dow Jones Industrial Average tumbled 1,175.21 points (4.6 per cent) to 24,345.75, having at one point plummeted nearly 1,600 points to hit a session low of 23,923.88.

The broad-based S&P 500 dropped 113.19 points (4.1 per cent) to 2,648.49, while the tech-rich Nasdaq Composite Index fell 273.42 points (3.78 per cent) to 6,967.53.

The White House said on Monday that President Donald Trump was focused on the long-term health of the economy, saying the fundamentals were "exceptionally strong," despite a strong market sell-off.

"The president's focus is on our long-term economic fundamentals, which remain exceptionally strong," said White House spokeswoman Sarah Sanders.

She cited "strengthening US economic growth, historically low unemployment and increasing wages for American workers."

Monday's losses, along with Friday's declines, erase the 2018 gains for the Dow and S&P 500, which were bolstered by euphoria over the passage of Trump's tax cut legislation at the end of 2017. The Nasdaq remained marginally higher on the year.

"What you're seeing is pretty uniform selling across the board," said Art Hogan, chief market strategist at Wunderlich Securities. "We're out of practice watching momentum going in the opposite direction."

Wall Street stocks have been on shaky ground for the last week amid concerns over elevated Treasury bond yields and the likelihood of additional Federal Reserve interest rate hikes this year as the US economy strengthens.

Friday's robust jobs report contributed to the sell-off amid rising concern the Fed will accelerate the pace of monetary policy tightening.

The jobs data showed strengthening wages, suggesting the long run of low inflation could be shifting just as new Fed Chair Jerome Powell takes office. Powell was sworn in Monday.

All 30 companies in the Dow finished in the red, with the biggest losers including Boeing, Cisco Systems, ExxonMobil, Home Depot, Johnson & Johnson and Pfizer. All were down more than five per cent.

AFP/ AP photo

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