Financial News

Dow wipes out gains for the year with 600-point plunge

By Carleton English

AP

October has been a spooky month for Wall Street.

Major stock indexes saw their gains wiped out for the year as fears of weakened global growth, a slowdown in once-high-flying tech stocks and continued rate hikes had investors rushing for the exits.


The tech-weighted Nasdaq plunged 4.4 percent — suffering its worst day in seven years — as concern mounted that trade tensions between the US and China could dent profits.

Both the Dow Jones industrial average and S&P 500 are in negative territory for 2018 after falling 2.4 percent and 3.1 percent in Wednesday’s volatile session.

The CBOE Volatility Index — the Wall Street fear gauge known as the VIX — climbed almost 22 percent, to 25.2, late on Wednesday as the Dow shed nearly 400 points in the last two hours of trading to end the day down 608.01 points, at 24,583.42.

For all the panic, analysts had a difficult time pointing to one clear catalyst for Wednesday’s bloodletting.

“At this point, it’s really only one thing: outright fear. Fear that a full-blown correction gets worse,” Michael Antonelli, managing director at RW Baird, told The Post.

Also weighing on Wall Street are the upcoming midterm elections, which may have traders feeling skittish with their dollars until the outcome is known.

“It’s a matter of getting through the uncertainty,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

Adding fuel to the fire was the release of the Federal Reserve’s Beige Book, which indicated that US companies are worried about tariffs and rising material costs.

Companies tend to “pass prices to the consumer or eat them, which means lower earnings, and that’s knocking the wind out of the market, said Peter Cardillo, chief market economist at Spartan Capital Securities.

For all the fear in the market, some on the Street were less worried.

“The economy is fine, earnings are fine, the Fed is doing exactly what it should do and investors should do to the market what the Fed is doing to the president right now — ignore it,” said Jamie Cox, managing partner at Harris Financial Group.

Early trading was less volatile as jet manufacturer Boeing boosted its outlook after reporting better-than-expected third-quarter profits.