The Dow and the S&P 500 on Monday lost more than 2 percent
The us stock markets on Monday showed a sharp drop: the Dow fell below $ 25 000 points, having fallen from recent record highs amid rising bond yields and a possible strengthening of the inflation.
All three major American indices lost over 1 percent and the Dow and S&P 500 more than 2 percent. By the end of trading the Dow lost over 1000 points.
Most of the losses suffered in the energy, financial and healthcare sectors, but losses were widespread, covering all 11 major groups in the S&P.
On Monday, the S&P 500 lost more than 6 percent from a record reached on January 26.
Published in the Friday report on the labor market has caused concern about the prospects of inflation and rising bond yields, and possible acceleration of the increase of rising interest rates. The yield on 10-year Treasury bonds fell after rising to 2,885 per cent, a record high since January 2014.
“When rates rise, typically the financial conditions tighten and Bank lending, mortgage lending slowed, and in the economies there is the risk of recession,” notes investment strategist at Allianz Global Investors in new York, Mona Mahajan.
The Dow Jones Industrial Average index lost 3.36 percent, or 24 663, 06 points, S&P 500 73,53 points, or 2.66 percent, to 2 688,6 points, and the Nasdaq Composite – 160,71 points, or 2.22 percent, to 7 080 23 points. The Dow fell below $ 25,000 item for the first time since January 4th.
S&P 500 and Dow fell below the 50-day moving average, which observers are carefully tracked.
CBOE volatility index reflecting stock market volatility in the short term, jumped 13,40 per cent to 30.71 per cent – the highest level since February of 2016.
The recession began after the Dow and S&P showed the largest drop since January of 2016, and the Nasdaq, the largest weekly drop since February of 2016.
“I think the fact that there’s a recalibration as in the bond market and the stock market, – said the head of the new York-based Richard Bernstein Advisors Richard Bernstein. No one can predict the timing of short-term adjustments. The question is, whether there is a case to sudden changes in the market securities with a duration of several quarters and we do not track”.
The mood of investors in relation to risk-weighted assets could also be affected by the drop in oil prices and bitcoin.
The decline in the stock market occurred against the backdrop of a relatively profitable season, and investors referred to, speaking in support of the securities.
Despite the fact that the data came from approximately half of the S&P 500, the yield in the fourth quarter, as expected, increased by 13.6 percent, according to estimates by Thomson Reuters I/B/E/S.
On the new York stock exchange declining issues outpaced rising with an index of 5.92 to 1 on Nasdaq of 4.59 to 1. The S&P 500 was 1 52-week high and 23 new low, the Nasdaq Composite – 17 new highs 126 new lows.