US Market Indexes Continue Losses Thursday

Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange

Wall Street stocks tumbled on Wednesday (Dec 19) after the Federal Reserve lifted interest rates while pledging a cautious approach to additional interest rate hikes next year.

In addition to the Dow's 1.8 percent drop, the Nasdaq closed down 195 points for a 3 percent drop and the S&P 500 closed down 50 points for a 2.06 percent drop.

The broad-based S&P 500 slid 1.6 per cent to 2,467.16, while the tech-rich Nasdaq Composite Index slumped 1.7 per cent to 6,526.29.

The Nasdaq also set a 10-year record with a 8.4 percent plunge this week, the worst since November 2008.

United States stocks closed lower on Friday as investors digested the latest economic data, speech from a central bank official, and the fact that the government is on the verge of a partial shutdown.

The Russell 2000 is down nearly 24 percent from the peak it reached in late August and it's down 13.6 percent for the year to date. Markets tend to move, however, on what investors anticipate will happen further out.

Investors are responding to a weakening outlook for the US economy by selling stocks and buying ultra-safe USA government bonds.

Wren said investors felt Fed Chairman Jerome Powell came off as unconcerned about the state of the US economy and fears that the economy could not just slow down, as expected, but go into a recession in 2019 or 2020.

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Trump added that it is the Democrats that are forcing the government shut down as they "continue to oppose border security". A simple majority is now used for judicial and executive nominations but does not apply to most legislation.

"Technology is part of the same story as the overall market", said Scott Wren, global equity strategist at the Wells Fargo Investment Institute. Even with the drop since late August, Nasdaq is almost 400 percent above its March 2009 low, with a total return of more than 456 percent.

The benchmark S&P 500 index, already on pace for its biggest percentage decline in December since the Great Depression, hit its lowest level since July 2017.

The Dow has fallen 10 per cent from its September peak, wiping out all gains for the year.

The Dow fell 518 points, or 2.2 percent to 22,718.

The possibility of a partial shutdown of the federal government at midnight Friday also loomed over the market.

Bond prices rose, sending yields lower. And the S&P 500 shed 2.1%.

Other fuel prices also fell. The Russell 2000 index of smaller companies dropped another 23.23 points, or 1.7 percent, to 1,326. Indexes in Italy, Portugal and Spain took bigger losses. Brent crude, used to price global oils, slipped 4.8 percent to $54.50 a barrel in London. Google parent Alphabet was down 3 per cent, Amazon down almost 5 per cent, Facebook down more than 5 per cent, Netflix almost 5 per cent and Apple was in the red less than 2 per cent.

The dollar index rose 0.76 percent, with the euro down 0.74 percent to $1.1359. Natural gas gave up 3.8 percent to $3.58 per 1,000 cubic feet.

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