All thirty Dow components ended lower for the day led by Caterpillar, Chevron and Goldman Sachs.
US stocks suffered big losses on Thursday, 09 October 2014 at Wall Street. U.S. stock investors scrambled for the exits on Thursday, sending the Dow Jones Industrial Average down 335 points, its worst one-day point plunge in more than a year. Thursday's brutal losses came on the heels of a 275-point rally, which marked some of the sharpest gains the market had seen in months. Wednesday's gain followed a 273-point plunge on Tuesday. Those topsy turvy movements highlight what's been a frenetic series of trading sessions in the past several months.
The Dow Jones Industrial Average slid 334.97 points, or 2%, to 16,659.25, marking its fourth drop of more than 300 points this year. The Nasdaq Composite fell 90.26 points, or 2.2%, to 4,378.34. The S&P 500 fell 40.68 points, or 2.1%, to 1,928.21, its biggest one-day percentage drop since April 2014.
All thirty Dow components ended lower for the day led by Caterpillar, Chevron and Goldman Sachs.
Equities began the trading day with modest losses, but the energy sector was a notable laggard from the start once again. That prevented the broader market from turning positive while the relative weakness among most of the remaining cyclical sectors allowed for the selling to feed on itself.
The big sell-off in the U.S. stock market on Thursday added to the sell off in crude. Traders were still digesting the dovish Federal Reserve Open Market Committee (FOMC) minutes released on Wednesday. The Fed expressed increasing concern about weakening world economies and some FOMC members questioned whether the appreciation of the U.S. dollar against the other major currencies might act as a drag on the U.S. economy. The market place reckons the FOMC minutes hint the Fed may have to hold off longer on raising U.S. interest rates, given the increasing concerns about weakening world economiesespecially the serious weakness coming out of the European Union.
Importantly, the FOMC minutes also suggested the Fed is worried about the recent appreciation of the U.S. dollar curtailing U.S. economic growth. The U.S. dollar index sold off overnight on the FOMC news, but rallied during the U.S. day session as the U.S. stock market sold off.
At Wall Street, government data showed the number of people applying for unemployment benefits was below 300,000 for the fourth week in a row. Weekly initial claims ticked down to 287,000 from a downwardly revised rate of 288,000 (from 287,000), while the consensus expected a reading of 295,000. Once again, the Department of Labor said there were no special factors affecting the reading, suggesting an improvement in labor market conditions. The four-week moving average of 287,750 for initial claims is at its lowest level since February, 2006. Separately, Wholesale inventories increased 0.7% in August after increasing an upwardly revised 0.3% (from 0.1%) in July, while the consensus expected an increase of 0.3%.
Among stocks under focus, Gap Inc shares slumped 12.5% after the retailer reported a drop in same-store sales. The company said chief executive and chairman Glenn Murphy will retire in February 2015. Art Peck, president of the growth, innovation and digital division, will succeed Murphy as CEO.
Alcoa fell 4.4% in regular trading despite the aluminum producer beating Wall Street's third-quarter earnings earnings estimates as stocks were dragged down amid the selloff.
It was bright day for bullions on Thursday, 09 October 2014 at Comex. Gold prices ended the U.S. day session with solid gains and hit a three-week high on Thursday. Prices did back down from the early gains to close near the middle of the day's trading range. A combination of heavy short covering in the futures market, bargain hunting and safe-haven buying boosted the yellow metal.
December Comex gold was last up $19.60 at $1,225.70 an ounce. December Comex silver last traded up $0.376 at $17.44 an ounce.
Crude prices plunger at Nymex on Thursday, 09 October 2014. Macroeconomic concerns aside, crude prices were also pressured by the dollar rebounding from three days of losses.
West Texas Intermediate crude plunged 2.4% to $85.22/bbl while Brent crude slipped below the $90.00/bbl level for the first time in more than two years. Following today's slide, WTI crude is down 6.8% since the start of October.
Today's participation was stronger than average with 874 million shares changing hands at the NYSE floor.
Tomorrow, Import/Export Prices for September will be announced at 8:30 ET while the September Treasury Budget (consensus $106 billion) will be released at 14:00 ET.
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