Market Update & Important Indicators
The Dow Jones Industrial Average plunged Monday, dropping nearly 1,600 points at one point, and remains on track for its largest one-day point decline on record. The global selloff in stocks rippled through Europe and Asia as well, as a long-running market rally threatened to become a rout. Indexes in all three regions gave up their gains for 2018.Monday's losses were broad-based, with all 11 sectors in the S&P 500 posting declines, led by losses in the energy, financials and health-care segments. The Dow declined 1175 points, or 4.6%, to 24346. The S&P 500 lost 4.1% and the Nasdaq Composite fell 2.1% – with both indexes heading toward their first three-day declines since December. The stock market has stumbled after a strong start to 2018 as investors have expressed concern that a long streak of tepid inflation and low interest rates could be drawing to a close. Inflation remains at low levels, but investors took Friday's jobs report, which showed U.S. wages rising at their strongest annual clip since June 2009, as fresh evidence that the economy is heating up. Still, some investors say the stock rally is merely pausing after a strong 2017 run that took many by surprise. With the recent losses, the Dow industrials are still up about 0.7% for 2018. The U.S. gold price traded higher overnight, adding 0.5% to finish at 1,339.00 US$/oz.
European shares fall as stock markets around the world flounder in a sea of red over fears about potential interest rate rises. The Stoxx Europe 600 drops more than 1.5%, or 6.07 points to 382 as the region's major indices all end Monday in negative territory.
Many wider indexes in Asia recorded steep declines, catching up with the fall in the U.S. and Europe on Friday and lower oil prices. Hong Kong's Hang Seng Index fell as much as 2.7% before paring declines to 1.1%. Japan's Nikkei Stock Average fell below 23000 for the first time in 2018 and closed down 2.5%.
Australian stocks logged their sharpest drop since June 30 amid Friday's skid in European and US stocks reaching Asia Pacific today. The S&P/ASX 200 fell 1.6% to 6026.2, effectively wiping out the last 3 sessions' gains. Losses were broad, led by falls of more than 2% in energy and materials. Utilities was the only up sector, and barely at that. The heavily weighted major banks were all down at least 1.2% while Wesfarmers sank 4.5% after flagging a poor performance by 2 of its units. The market's fall offers a grim backdrop as earnings season kicks heats up, with an update due tomorrow from Macquarie – followed by reports later this week from Rio Tinto, Commonwealth Bank, AGL and a raft of others.
The London Metal Exchange’s 3-month copper contract traded higher overnight, finishing 1.8% stronger at $7,169/t. The other base metals finished mostly higher. Aluminium prices fell 0.1% to $2,211/t, while lead prices shed 1.6% to close at $2,661/t. Zinc prices rebounded 1.3% to $3,596/t, while Tin prices jumped 1.8% to $22,070/t. Nickel prices recovered, closing 2.3% higher at $13,705/t.
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