por admin » Lun Oct 29, 2018 2:12 pm
Dow drops, led by Boeing, in 600-point decline from the highs of the day
Fred Imbert | Thomas Franck
Published 9 Hours Ago Updated 2 Mins Ago
CNBC.com
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Stocks gave up all of their sharp gains from earlier on Monday as the possibility of more U.S.-China tariffs, coupled with a decline in tech shares, offset strong gains from banks.
The Dow Jones Industrial Average traded 200 points lower, erasing a 352-point gain, as Boeing dropped more than 5 percent. The Nasdaq Composite fell 1.5 percent. The S&P 500 traded 0.5 percent lower after gaining more than 1 percent earlier in the day.
Bloomberg News reported that the U.S. is planning on slapping tariffs on more Chinese products if upcoming talks between President Donald Trump and Chinese President Xi Jinping falter. Both countries have already implemented levies on billions of dollars worth of each other's goods.
Amazon and Netflix rolled over throughout the day, capping the stock market's gains; the stocks were down 5 percent and 4.3 percent, respectively. These losses offset strong gains from bank shares.J.P Morgan Chase, Wells Fargo and Bank of America all climb 2 percent each, while Goldman Sachs gained 1.8 percent. The SPDR S&P Bank ETF (KBE) surged 3 percent.
Monday's moves come after a 3 percent drop on the Dow last week, which was capped off by a decline of nearly 300 points on Friday. The S&P 500 and Nasdaq dropped 3.9 percent and 3.8 percent, respectively.
Worries over a possible slowdown in corporate earnings growth, as well as in the global economy, have sent the major indexes down sharply this month. The Dow and S&P 500 are down 6.7 percent and 8.8 percent, respectively, for October. The Nasdaq, meanwhile, has lost 10.9 percent through Friday's close.
Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.
"It's likely we see some lows get retested once again, once again we can't assume a v-bounce as many were calling for back in early October," said Andrew Thrasher, portfolio manager for The Financial Enhancement Group and founder of Thrasher Analytics, said in a note.
"Typically, v-bottoms show themselves when the market declines on news, as in a single event that rocks the market but that wasn't the case this time," Thrasher said. "Instead we saw a slow bleed in market participation that finally broke the dam of selling and sent stocks across the board lower."
The S&P 500's decline this month has shaved off $2.141 trillion in market cap, according to data from Howard Silverblatt of S&P Dow Jones Indices. Silverblatt's data also show Amazon, Microsoft, Nvidia, Facebook and Apple are among the biggest contributors to the decline this month. Facebook and Apple will both report financial results later this week.
"The market will not reward earnings unless you've got growth in the top line, bottom line and guidance. It can be brutal for companies that don't hit all those marks," said Quincy Krosby, chief market strategist at Prudential Financial. "There are questions remaining on whether this market can really regain strength if tech doesn't lead."
Still, the major U.S. stock indexes rose on the back of sharp gains in European shares. The Stoxx 600 index, which tracks a broad swath of European stocks, rose 1.7 percent. In Germany, the Dax index climbed more than 2 percent.
U.S. stocks also got a boost after IBM agreed to buy Red Hat, an open-source software distributor, for around $34 billion. Red Hat shares surged nearly 45 percent on the deal, while IBM's stock fell more than 3 percent.
"While it will take some time to see the merits of this deal manifest and the impact on enterprise hybrid cloud competitive deployments in the field … we believe the combination of Red Hat and its Linux cloud platform with IBM could represent a formidable cloud behemoth for the coming years," said Dan Ives, an analyst at Wedbush Securities, in a note to clients.
—CNBC's Sam Meredith contributed to this report