Dow, S&P 500 in the red for 2018 after bruising session
An early stocks rebound proved too fragile to last
Wall Street stocks finished sharply lower Wednesday, wiping out the remaining 2018 gains for the Dow and S&P 500 in a bruising session that got dramatically uglier in the final 90 minutes.
The US losses, which followed an uneven day for equities in Asia and Europe, came after another round of mixed US earnings that exacerbated fears about slowing profits.
But earnings have only been one factor that has hung over markets in recent weeks. The expectation the Federal Reserve will continue to raise interest rates also has buffeted stocks this month, alongside anxiety over the fallout from the murder of Saudi Arabian journalist Jamal Khashoggi and an ongoing budget dispute between Italy and Brussels.
A US data report Wednesday showed home sales fell to their slowest pace in nearly two years, while a Fed report illustrated how firms nationwide are worried about the rising hit from tariffs and widespread labor shortages.
Adding to the sense of unease were a series of mail bombs and suspicious packages sent to prominent Democrats, critics of President Donald Trump, including former President Barack Obama and Hillary Clinton, less than two weeks before the midterm congressional elections.
Jack Ablin, chief investment officer at Cresset Wealth Advisors, said the selling appeared to be "emotionally" driven since there has been no sign of tightening credit, or other manifestations of a slowing economy.
"Perhaps it's just a ratcheting up of chaos," he said.
In the end, the Dow Jones lost 2.4 percent to close at 24,583.42, a single day loss of more than 600 points.
The tech-rich Nasdaq Composite Index plummeted 4.4 percent to finish at 7,108.40, posting its worst day since 2011.
- Tech selloff -
While not suffering as deep losses on Wednesday, sentiment in Europe remained uneasy as many investors around the world fleeing riskier assets.
"There is clearly still a huge amount of anxiety in the markets right now," Oanda senior market analyst Craig Erlam said.
US companies suffering big declines after earnings reports included AT&T, UPS and Texas Instruments, whose dreary forecast also weighed on other chip companies.
Large technology shares, big winners during much of the bull run period since the financial crisis, had a rough day.
Amazon lost 5.9 percent, Facebook 5.4 percent, Google-parent Alphabet 4.8 percent and Netflix 9.4 percent.
Caterpillar shares lost more ground after reporting disappointing quarterly results
Investors also have been unnerved by comments from industrial companies saying trade conflicts have raised material costs.
A rare bright spot was Boeing, which advanced 1.3 percent after raising its full-year profit forecast.
But other large industrial companies in the Dow fell, including Caterpillar and 3M which dropped 5.6 percent and 4.2 percent, respectively. The two companies also fell sharply on Tuesday following disappointing results.
- Key figures around 2100 GMT -
New York - Dow: DOWN 2.4 percent at 24,583.42 (close)
New York - S&P 500: DOWN 3.1 percent at 2,656.10 (close)
New York - Nasdaq: DOWN 4.4 percent at 7,108.40 (close)
London - FTSE 100: UP 0.1 percent at 6,962.98 points (close)
Frankfurt - DAX 30: DOWN 0.7 percent at 11,191.63 (close)
Paris - CAC 40: DOWN 0.3 percent at 4,953.09 (close)
EURO STOXX 50: DOWN 0.3 percent at 3,130.33 (close)
Tokyo - Nikkei 225: UP 0.4 percent at 22,091.18 (close)
Hong Kong - Hang Seng: DOWN 0.4 percent at 25,249.78 (close)
Shanghai - Composite: UP 0.3 percent at 2,603.30 (close)
Euro/dollar: DOWN at $1.1393 from $1.1471 at 2100GMT
Pound/dollar: DOWN at $1.2884 from $1.2983
Dollar/yen: DOWN at 112.19 from 112.44 yen
Oil - Brent Crude: DOWN 27 cents at $76.17 per barrel
Oil - West Texas Intermediate: UP 39 cents at $66.82 per barrel
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