Wall Street Struggles While Erasing Year’s Gains
U.S. stock markets erased all of their 2018 gains on Wednesday, rattling global investors with a selloff that spread into Thursday’s Asian session. The Nasdaq entered correction territory, closing down 12.4 percent from its record-high close on August 29th. Wednesday’s 4.4 decline for the Nasdaq notched its biggest daily slide since August 2011.
The Dow Jones Industrial Average plummeted 608.01 points on Wednesday, effectively erasing all of its gains since the start of the year. The S&P 500 faced the same fate, dropping 3.1 percent on Wednesday. The selloff may have been prompted by several factors, not the least of which was growing concern about the country’s slowing economy and the pressure of rising interest rates. The Commerce Department’s latest data, released yesterday, showed that new home sales were at a two-year low, an announcement which sent homebuilder stocks broadly lower. Bank shares also struggled on concerns that mortgage and other loan requests would decline.
The ongoing trade war between the U.S. and China has also kept investors running scared, with the continued tariffs concerning investors that global trade will slow down. In Asia, benchmark indexes were broadly lower. Japan’s Nikkei 225 was down 3.29 percent as of 12:47 pm. HK/SIN. Hong Kong’s Hang Seng Index was down 1.80 percent. The Shanghai Composite was down 1.42 percent while the Shenzhen Composite was down 1.78 percent. South Korea’s Kospi saw a 2.01 percent decline.
Gold prices continued to rally as traders flocked to the safe-haven commodity, though traders began to question how long the rally would last. Gold futures were up 0.67 percent to $1239.40 per ounce just after noon in Hong Kong.