Dow dives nearly 500 points as US economy worries investors
The Dow and the broader stock market went deep into the red on Wednesday, as worries about the economy continued to rattle investors.
At its lowest point, the Dow fell nearly 600 points, dropping below 26,000 for the first time since the beginning of September, when new trade tariffs came into effect and soured market sentiment.
It was the second down day in a row. Tuesday’s decline was set off after a worse-than-expected report on America’s manufacturing sector.
The Dow closed a little below 500 points, some 1.9% lower.
The S<><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><>&P 500 fell 1.8%, while the Nasdaq dropped 1.6%./ppAll three indexes posted their worst one-day drops since August 23, when a href=”https://www.cnn.com/2019/08/23/investing/dow-stock-market-today/index.html” target=”_blank”China announced retaliatory tariffs on US imports/a./ppInvestors are now worried that weaker-than-expected private payrolls data and Friday’s jobs report could also disappoint, making matters worse. There has been no good news to offset these concerns./ppa href=”https://www.cnn.com/business/live-news/stock-market-news-today-100219/index.html” target=”_blank”Live: Follow coverage of today’s news on markets, companies and the economy/a/ppElsewhere, the 10-year US Treasury yield tumbled, falling below 1.59%. Treasuries are a safe haven investment, and demand for them goes up in times of uncertainty, leading to lower yields./ppStocks began selling off Tuesday, after a report by the Institute of Supply Management showed America’s a href=”https://www.cnn.com/2019/10/01/economy/ism-manufacturing/index.html” target=”_blank”manufacturing sector contracted for a second month in a row/a in September. The index, which measures month-to-month changes in the industry, dropped to its lowest level since June 2009./pp”I think yesterday’s US manufacturing PMI report was a game changer,” said Fawad Razaqzada, technical analyst at Forex.com, in emailed comments./ppEven though consumers are a more important component of the US economy than manufacturing, investors can’t ignore the slowdown. Now the worry is whether it could spill over to weaken the consumer./pp”Up until now, the US manufacturing and other sectors of the economy had remained resilient despite weakness in other economic regions like the Eurozone and China… but now investors are worried that the largest economy has also caught the cold,” Razaqzada said./ppa href=”https://www.cnn.com/business/live-news/stock-market-news-today-100219/h_eb95c606b975af36da351abfb86c5228″ target=”_blank”Trump blamed the market selloff on the impeachment inquiry/a and the Federal Reserve’s monetary policy a href=”https://twitter.com/realDonaldTrump/status/1179415529074900992″ target=”_blank”in a tweet/a earlier./ppSo far, markets have shrugged off the inquiry, but it adds to the risks on investors’ minds. Other global risks also include the uncertainty surrounding Brexit and geopolitical concerns in the Middle East, which together paint a bleak outlook for global growth./ppThe market is turning into a “sell first and ask question later market,” said Ryan Detrick, senior market strategist for LPL Financial./pp”October is known for being one of the most volatile months and after two days, it is living up to that reputation,” Detrick added./ppThe disappointing data mounted early Wednesday, when a href=”https://www.cnn.com/business/live-news/stock-market-news-today-100219/h_e018e70c03658ce8b0fb00eaf7d9d509″ target=”_blank”private payrolls for September undercut expectations/a. The report also sharply revised the August numbers down, which is adding some nervous tensions ahead of Friday’s US jobs report./ppSo far, American consumers have kept the economy roaring, in part because the country is near full employment. Should this change, GDP growth could get hit./p