Wall Street plunges as investors seek safety


The Dow Jones Industrial Average fell 430 points Wednesday morning, or around 1.6 percent. The stock fell 16.8 percent to 49 cents.

Oil prices fell more than 2 percent as U.S. stocks plunged, even though energy traders anxious about shrinking supply from Iran due to U.S. sanctions and kept an eye on Hurricane Michael, which closed almost 40 percent of U.S. Gulf of Mexico output.

Tech stocks declined due to rising bond yields, which followed a spike in rates for the benchmark United States 10-Year Treasury.

The 10-year Treasury yield remained at 3.20 percent, about where it was late Tuesday, after earlier touching 3.24 percent. Delta Air Lines shares rose 3.8 percent after the airline beat profit expectations.

At its worst, the Dow Jones index dropped by as much as 699 points, before closing 546 points (2.1 per cent) lower at 25,053. Amazon and Alphabet, respectively the second- and fourth-most valuable US companies, are in what's known as a "correction", a drop of more than 10 percent from a recent peak. Technology companies were among the losers, with the Nasdaq Composite dropping more than 2% to 7,575.34.

The Dow ended down 831 points, or 3.1%, at 25,598.

Banks are taking some of the biggest losses. In the S&P 500, the technology sector led losses with a decrease of -4.50%. They've also dropped more than the rest of the market so far this month. Amazon plunged 6.2 percent.

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Fears over the global trade war, rising rate hikes, the impact of Hurricane Michael, the upcoming USA midterm elections and a potentially disappointing Q3 earnings season likely all played a role in the weak market. But higher interest rates can slow economic growth and erode corporate profits.

Gina Martin Adams, the chief equity strategist for Bloomberg Intelligence, said investors fear that company profit margins will be squeezed by rising costs, including the price of oil.

Paint and coatings maker PPG gave a weak third-quarter forecast Monday, while earlier, Pepsi and Conagra's quarterly reports reflected increased expenses.

Declining issues outnumbered advancers for a 3.42-to-1 ratio on the NYSE and a 2.46-to-1 ratio on the Nasdaq. Many stock-market observers pin the start of the current bull market, the longest since World War II, at March 9, 2009.

Sears Holdings plunged 32 percent after the Wall Street Journal said the debt-laden retailer was preparing for a possible bankruptcy. Over the years, Sears has closed hundreds of stores and sold several famous brands.

This article was published at 7:15 a.m. The Japanese yen strengthened 0.53 percent versus the greenback at 112.36.

The two-day 4.7-percent drop in the SPDR S&P 500 ETF (NYSE: SPY) comes after the S&P 500 gained 22.2 percent in the previous 18 months. The euro rose to $1.1525 from $1.1496.