Global markets in sell-off mode

Futures Slump on Global Riskoff Sentiment; Caterpillar Weighs

Futures Slump on Global Riskoff Sentiment; Caterpillar Weighs

Media and communications stocks, health care companies and banks also took heavy losses. Bond prices rose, sending yields lower, as investors continued to seek less risky assets.

The Dow Jones Industrial Average rose 401 points, or 1.6 percent, to 24,984.

Trader Michael Capolino works on the floor of the New York Stock Exchange, on today.

U.S. stocks tumbled Friday as a technology rout rattled markets around the world, days after concerns about rising rates and the prospect of slowing global economic growth had wiped out Wall Street's gains for the year.

Companies began reporting their results for the third quarter last week.

"When we get beyond earnings season and investors are wondering what now can drive the market higher or lower, knowing that we had a strong earnings season and companies did not lower their guidance very much will provide some support for stocks", she said. "That's causing some of this volatility".

Overall, the Dow has declined by 7.1 percent in October, S&P by 8.9 percent and the Nasdaq by 11.7 percent.

The SPI200 futures contract was down 94 points, or 1.62 per cent, to 5,700.0 at 0800 AEDT on Thursday, signalling another opening plunge for the local market after energy and materials shares drove it lower on Wednesday. The average had been down more than 540 points.

On Friday, France's CAC 40 index fell 1.3%, while the Dax slipped about 1%. S&P 500 companies delivered second-quarter earnings growth of 25.2 per cent, well ahead of forecasts. The fall has erased all remaining gains made by the market in 2018.




Rising rates and the trade dispute could both impair economic growth, and some encouraging economic news helped stabilize markets.

Top of the list is the USA trade war with China.

Declining issues outnumbered advancing ones on the NYSE by a 3.38-to-1 ratio; on Nasdaq, a 5.42-to-1 ratio favored decliners. Semiconductor maker Tokyo Electron lost 4.3 per cent and Taiwan Semiconductor Manufacturing Co. dropped 4.4 per cent. Shares of Alphabet, the parent company of Google, fell more than 2 percent after its revenue growth also missed expectations.

The beaten-down technology sector fell 1.37 percent, led by chipmakers, over concerns of slowing growth in China and ahead of key earnings.

Texas Instruments, a major chipmaker, slumped 5.5 percent after its results missed forecasts. A correction is when shares drop at least 10 percent from their recent highs. With strong consumer spending offsetting weaker investment and exports, gross domestic product rose at a seasonally adjusted 3.5% in the third-quarter.

Investors may also be signaling their concern that interest rate hikes by the Federal Reserve will dampen USA economic growth, according to Capital Economics.

Brent crude, the benchmark for global oil prices, dropped 0.5 percent to $76.52 a barrel in London. On Wednesday it edged up 0.6 per cent Brent crude, used to price global oils, gained 4 cents to $76.21 a barrel.

CURRENCIES: The dollar strengthened to 112.51 yen from 112.47 yen on Tuesday. The euro rose to $1.1408 from $1.1393. Gold, another safehaven, jumped to its highest level since July - at around $1,234 per ounce. Copper dipped 0.5 percent to $2.74 a pound.

"Market technicals are showing signs of improving, with fewer stocks reaching 4-week lows yesterday and weak market depth of trading activity likely close to a bottom", Draho added.

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