Stocks are dropping in rapid fashion. The Dow is now down more than 300 points

FAN Editor

Stocks fell on Thursday, giving back some of the gains from the previous session that led two of the three major indexes to record highs. 

The Dow Jones Industrial Average was down more than 300 points, or about 1%. The S&P 500 slid 1% and the Nasdaq Composite dropped 1.6%.

Goldman Sachs slid 1.8%, hitting its lows of the day in late-morning trade. Intel was the worst-performing stock in the Dow, falling 3%. Apple shares turned negative to trade 1.3% lower. 

Thursday’s moves come a day after the S&P 500 and Nasdaq hit record highs. 

“This market is just moving on momentum and, at this point, it’s priced close to perfection,” said Christian Fromhertz, CEO of The Tribeca Trade Group. “At this point, if we start seeing anything negative, it will probably force some people to start taking profits.”

Traditional safe havens such as bonds and gold got a boost. The benchmark 10-year note yield fell to 1.52%, around its session low. Yields move inversely to prices. Gold prices climbed to a seven-year high, trading 0.8% higher at $1,624.70 per ounce. 

Earlier in the day, a high-ranking Federal Reserve official poured cold water on market expectations for easier monetary policy from the U.S. central bank.

“Market pricing on rate cuts is a little tricky,” Fed Vice Chairman Richard Clarida told CNBC’s Steve Liesman, noting that he prefers to look at economists’ forecasts over futures markets on Fed rates. Clarida noted the majority of economists do not expect a rate cut soon from the Fed.

“I don’t think when you ask folks they’re pricing in that rate cut, even though market pricing might suggest that,” he added.

Traders have been pricing in at least one rate cut from the Fed for this year, CME Group’s FedWatch tool shows. Expectations for lower rates come as investors grapple with the outbreak of the deadly coronavirus and its ramifications for the global economy.

Traders work on the floor of the New York Stock Exchange.

Seth Wenig | AP

China’s National Health Commission on Wednesday reported that 74,576 cases of the new coronavirus have now been confirmed, with 2,118 deaths on the mainland. Coronavirus cases are also spiking in South Korea. The country said confirmed cases have jumped to 82, more than double the previous number of cases.

“The coronavirus reminds us just how small the world is,” said Ed Yardeni, president and chief investment strategist at Yardeni Research. “Even as the infection has been largely contained to China, the business ramifications have rippled across the world.”

S&P Global Ratings warned in a report on Thursday that Chinese lenders could be hit by as much as $1.1 trillion in questionable loans as the coronavirus ripples through China’s economy, while Goldman Sachs has said that markets are underestimating the potential fallout from the outbreak, suggesting the “risks of a correction are high.”

To be sure, China’s central bank cut its one-year loan prime rate by 10 basis points overnight in an effort to mitigate the economic fallout from the coronavirus. A summary of the Fed’s January meeting also showed the U.S. central bank is monitoring the spread for any impact on the U.S. economy.

On the data front, weekly jobless claims were in line with expectations at 210,000. The Philadelphia Fed business index surged to 36.7 in February from 17 in January.

In corporate news, Morgan Stanley is buying e-Trade for $13 billion. The news sent e-Trade shares up more than 20% while Morgan Stanley dipped 4.1%.

Domino’s Pizza shares jumped more than 23% on the back of quarterly results that beat analyst expectations. Viacom dropped more than 14% on disappointing earnings. 

—CNBC’s Elliot Smith contributed to this report. 

Free America Network Articles

Leave a Reply

Next Post

Inspectors in Wuhan go door-to-door searching for every coronavirus case

“Wartime” measures have been implemented in some parts of the Chinese province of Hubei, which is home to Wuhan — the epicenter of the coronavirus outbreak. Some residents have been barred from leaving their apartments, and officials in protective suits were going door-to-door in Wuhan this week looking for infected […]