Dow Jones Serious 2016 Correction and the coming Crash !
This story was updated at 12:55a.m. EDT.
U.S. stocks tumbled sharply Friday after Britains vote to quit the European Union delivered the biggest blow to the global financial system since the 2008 financial crisis.
The Dow Jones Industrial Average was down 537 points, or 3 percent, in afternoon trading, sinking to the lows of the session. Other major stock indexes also plunged, including the broader Standard & Poors 500 stock index, which slumped 67 points, or 3 percent. The Nasdaq composite, which includes many tech names, tumbled a hefty 184 points, or 4 percent.
The S&P 500 index and the Dow posted their biggest intraday losses in more than five months and the Nasdaq staged its biggest intraday drop in more than four months before clawing back some ground in late morning trading.All three indexes were headed for their second weekly decline in a row.
"Markets clearly got it wrong and were obviously, to use the British term, "gobsmacked" by the result," said Aaron Clark, portfolio manager at GW&K Investment Management in Boston. "Investors are shooting first and will ask questions later."
Continue Reading Below
Investors worried about the outlook for the world economy sought refuge in the dollar and other safe-harbor assets such as gold and U.S. Treasury bondswhile dumping riskier shares. The yield on the U.S. 10-year bond hit its lowest since 2012.
Britain"s FTSE 100 stock index was down 3 percent. Asian stocks also tumbled.
Amid the turmoil, sterling hit a 31-year low in its biggest intraday percentage fall on record and Prime Minister David Cameron said he would step down by October.
It"s going to be a scary day,said Brad McMillan, chief investment officer at Commonwealth Financial in Waltham, Massachusetts.
The market was already expected to be volatile as traders adjusted portfolios to account for an annual reconstitution of the widely followed Russell stock indexes.
Were getting close to the end of the month so people are looking to rebalance their accounts anyway,McMillan said.
Banks were among the biggest losers.Citigroup was down 8 percent and Morgan Stanley 9 percent, while Bank of America, JPMorgan and Goldman Sachs slumped by between 5 and 6 percent.U.S. banks have big London operations.
Trading in S&P 500 and Nasdaq futures was halted briefly overnight after they fell more than 5 percent, triggering limit thresholds.
U.S. short-term interest rate futures rose amid speculation the Federal Reserve could cut interest rates to help shield the economy from any global fallout.
In a statement Friday, the Fed sought to calm global financial markets by saying it was ready to provide dollar liquidity following Britains vote to exit the European Union.
Investors have been waiting for the Fed to raise borrowing costs as the economy improves.
Fed Chair Janet Yellen said earlier in the week an exit of Britain from the EU would have significant repercussionson the U.S. economic outlook.
Futures on the VIX volatility index known as Wall Street"s fear gauge surged 33.7 percent to 23.07, above its long-term average of 20.
Oil prices, which are sensitive to changes in the economic outlook, dropped more than 4 percent, the biggest fall since early February. Exxon and Chevron were down about 2.5 percent.
Shares of gold miners surged Friday. Barrick was up 4 percent, and Newmont Mining was up just over 3 percent.
Apple, which got more than a fifth of its revenue from Europe last quarter, was down 2 percent, while Facebook was also down 2 percent.
U.S. stocks had risen in recent sessions as investors bet Britain would remain part of the EU.
As of Thursdays close, the S&P 500 index had risen 3 percent since the start of the year.
Reuters contributed to this report.
Source: http://www.ibtimes.com/dow-jones-industrial-average-free-fall-after-brexit-vote-rocks-global-financial-2386294
No comments:
Post a Comment