Wall Street slips on China crisis worries – New York Report
WITH Wall Street bracing for an interest-rate hike and fretting about weak Chinese trade data the S&P 500 index yesterday suffered its worst loss in six weeks.
The Dow Jones industrial average ended down one per cent at 17,730.48 points and the S&P 500 lost 0.98 per cent, to 2,078.58. The Nasdaq Composite dropped 1.01 per cent to 5,095.30.
The CBOE Volatility index, known as Wall Street’s fear index, rose 15 per cent to 16.52, the most in a single session in six weeks.
US companies face the prospect of higher borrowing costs if the Federal Reserve raises interest rates next month, as is widely expected after Friday’s strong jobs report.
“There are short-term myopic concerns about a Fed rate hike,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa. “Bond and stock prices will decline when the Fed makes that first announcement, but ultimately, stocks will thrive because it will prove the US economy is healthy enough to stand on its own.”
Investors also focused on renewed fears of a slowdown in China, a key market for many companies, ahead of the crucial holiday shopping season.
China, one of the US’ top trading partners, ended October with a record high trade surplus, with both exports and imports falling.
Only two Dow components rose. Walt Disney gained 0.65 per cent, while DuPont added one per cent after the chemical and seeds producer said interim chief executive Ed Breen would stay on.
After the bell, Lions Gate Entertainment posted second-quarter revenue below forecasts and its stock dropped 12.2 per cent.