Dow Jones drops 1,175 points at close, erasing gain for 2018
The Dow Jones industrial average briefly plunged nearly 1,600 points Monday as two days of steep losses for U.S. stocks brought an end to a period of record-setting calm in the market.
The Dow recouped about half that loss within minutes, but plunged again, its gains for the year gone at market close.
The slump began on Friday as investors worried that creeping signs of higher inflation and interest rates could derail the U.S. economy along with the market’s record-setting rally. Energy companies, banks, and industrial firms are taking some of the worst losses.
The Dow closed down 1,175 points. It was the largest loss in point terms: Its previous biggest point loss was a 777-point drop in September 2008 as the global economic crisis took hold.
Monday’s decline brought the Dow down 4.6 percent to 24,345.75.
The Standard & Poor’s 500 index, the benchmark most professional investors use, lost 113 points, or 4 percent, to 2,648.94, on track for its biggest loss since June 2016. The Nasdaq composite fell 273 points, or 3.8 percent, to 6,967.53. The Russell 2000 index of smaller-company stocks was down 52 points, or 3.3 percent, to 1,495.50.
The S&P 500 is now down 6.7 percent from its latest record high, set January 26. Investors are worried about evidence of rising inflation in the U.S. Increased inflation might push the Federal Reserve to raise interest rates more quickly, which could slow down economic growth by making it make it more expensive for people and businesses to borrow money. And bond yields haven’t been this high in years. That’s making bonds more appealing to investors compared with stocks.
The stock market has been unusually calm for more than a year. The combination of economic growth in the U.S. and other major economies, low interest rates, and support from central banks meant stocks could […]