Spooked by the risk of a government shutdown and still unnerved by the Federal Reserve's latest policy move, US stocks became unhinged on Thursday as the Dow Jones Industrial Average fell to its lowest level in more than a year and the Nasdaq entered bear market territory. Losses were heaviest in the energy and consumer discretionary sectors as risk aversion swept across Wall Street.
Selling erupted overnight as markets reacted negatively to Fed Chairman Jerome Powell's remark that unwinding the Fed's balance sheet was on "autopilot" fueling losses across Asian Europe with Japan's Topix entering bear market territory.
Wall Street opened lower and saw losses accelerate after trade war jitters were inflamed by DOJ charges against Chinese hackers, and after Treasury Secretary Steven Mnuchin's attempt to jawbone the market higher failed to stifle selling pressure. Late this afternoon, Fed Vice Chairman William Dudley flip-flopped between hawk and dove saying it wasn't the Fed's job to "take away the market's pain" but if the economy starts to weaken, the Fed should pause any further rate hikes. His latter remark stifled the freefall leaving the major indices off their worst levels, but still considerably lower from Wednesday's close.
On the economic front, jobless claims increased 8,000 to 214,000 versus; leading economic indicators increased a better-than-expected 0.2%; while the Philadelphia Fed manufacturing index slid to 9.4 from November's 12.9, missing expectations for an increase to 16.5.
Dow Jones Industrial Average was down 464.06 points (-1.99%)
S&P 500 was down 39.54 points (-1.58%)
Nasdaq Composite Index was down 108.42 points (-1.63%)
FTSE 100 was down 0.80%
Nikkei 225 was down 2.84%
Hang Seng Index was down 0.94%
Shanghai China Composite Index was down 0.51%
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