Stocks are getting hammered Monday. “What we’re seeing instead is confusion”, said Kate Warne, investment strategist at Edward Jones. “When investors get nervous about the overall market they sell everything and then figure out what things they shouldn’t have sold”.
The Dow Jones Industrial Average rose 113.35 points (0.70 per cent) on Friday to 16,314.67.
The tech-driven Nasdaq was also crushed, with a free-fall of 142 points to finish at 4543 – a loss of 3 percent. The SPDR S&P Health-Care Services ETF slipped 2.8 percent, extending its two-day loss to 4.5 percent.
Shares of pharmaceutical giant Valeant fell 10% after Democrats on the US House Oversight and Government Reform Committee asked their chairman to subpoena the company in relation to drug price hikes.
Nasdaq Biotechnology Index fell into a bear market on Friday amid its worst weekly decline in four years.
Raw-materials companies fell for the seventh time in eight sessions, losing 9.4 percent during the span and declining to the lowest in more than two years. But in just the last six trading days, it’s fallen almost 19% since Hillary Clinton tweeted her outrage about alleged “price gouging” by drug makers.
“The language environment in [pharmaceutical pricing] is going to be negative in the space”, said Jeffrey Yu, head of single stock derivatives trading at UBS AG.
The S&P Food Products index, which includes Campbell Soup and Hershey, fell 3% on Monday.
Pier 1 Imports Inc. slumped 12 percent to an nearly five- year low after cutting its fiscal 2016 profit forecast.
Media General soared 26 percent to $14.05 after Nexstar offered to buy the company in a deal valued at $4.1 billion.
Nine of the 10 major S&P sectors were lower. Chesapeake Energy Corp. and Consol Energy Inc. declined more than 7 percent. Williams Cos. added 1 percent after Energy Transfer Equity LP said it will combine with the rival pipeline operator.
The final assessment on US GDP for the second quarter showed growth hitting 3.9 per cent, above the previous estimate of 3.7 per cent and expectations from analysts for it to hold at that mark.
Concern over a slowdown in China, the world’s second-largest economy, and its potential impact on the Federal Reserve’s plans to normalize monetary policy after years of rock-bottom rates, has fueled market volatility in recent weeks.
“I think that the economy is doing pretty well”, Mr Dudley said at an event in New York.
This week will culminate with September non-farm payrolls data on Friday.
The euro dropped to $US1.1193 from $US1.1230 late on <strong>Thursdaystrong> in New York, with the USA currency winning strong support from the prospect of a Fed rate rise before the end of the year. Some investors interpreted the Fed’s decision to keep short-term rates near zero at its meeting in September as a lack of confidence in the USA economic recovery.
If the central bank doesn’t raise rates, it could have an even worse effect on share prices, said Keith Bliss, senior vice president at brokerage Cuttone. The yield on the benchmark 10-year Treasury note rose to 2.16 percent from 2.13 percent the day before.
ASIA’S DAY: China’s Shanghai Composite Index dropped 2.2 percent, while Hong Kong’s Hang Seng sank 2.3 percent.
The Stoxx Europe 600 closed 2.2% lower.