nsucurrent.com May 20, 2018

Dow posts biggest drop since May 2017 as United States stocks tumble

01 February 2018, 12:56 | Ruby West

Dow posts biggest drop since May 2017 as United States stocks tumble

Dow posts biggest drop since May 2017 as United States stocks tumble

The Dow had its biggest decline since May, losing 362.59 points, or 1.4 percent, to 26,076.89. The Standard & Poor's 500 index fell 1.1 percent to 2,822.43 - its steepest one-day drop since August 17. "Given the mountain of key items ahead, investors may have found the current period opportune for profit taking, though focused also on what these incoming leads may mean for markets".

Insurers, drugmakers and distributors slumped following news that Amazon was teaming up with JPMorgan Chase and Berkshire Hathaway to create a company that helps their US employees find quality care at a reasonable cost. The sector finished with a loss of 2.1 percent.

UnitedHealth Group Inc (UNH.N) fell 4.3%.

Investors were phased by the two day decline on Wall Street, as Gennadiy Goldberg, interest rates strategist at TD Securities in NY said this pushed people in to the arms of the safety of U.S. government bonds.

Interest rates on U.S. 10-year government bonds rose to 2.72 per cent, its highest level in nearly four years, amid concerns about higher inflation.

Markets could feel some early lift from response to President Trump's Tuesday night State of the Union address to Congress. Investor's ears will certainly be turned toward this afternoon's policy announcement from the Federal Open Market Committee, scheduled for 2 p.m. and the final FOMC meet under Federal Reserve Chair Janet Yellen.

Several big-name companies are due to report quarterly results on Wednesday and Thursday, including Apple, Amazon, Microsoft, Facebook and Google's parent company Alphabet.

Fourth-quarter earnings growth fo r the S&P 500 is now seen at 13.2 per cent, up from 12 per cent at the beginning of the year, according to Thomson Reuters data.

Anticipation over the Federal Reserve's next move on interest rates is affecting USA market indexes this week.

The Fed last hiked its benchmark interest rate in December, to 1.25 percent. The bounce for the price-weighted blue-chip gains will be powered by a sharp rally in shares of Boeing Co., which was up 5.1%, or more than $17, at about $355 in premarket trade. Natural gas rose 3 cents, or 0.9 percent, to $3.20 per 1,000 cubic feet. Brent crude, used to price global oils, dropped 44 cents, or 0.6 percent, to close at $69.02 a barrel in London. The euro rose to $1.2404 from $1.2389. On the other hand, other indexes closed higher. Japan's Nikkei 225 Index plunged by 1.4%, while Hong Kong's Hang Seng Index slumped by 1.1%.

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