Stocks Plummet as Global Worries Trigger Selloff…..
U.S. stocks dropped following decisive draw-downs out of Europe and Asia as a weakening of global sentiment shook the markets. Market participants appeared rattled as contagion uncertainty stemming from a potential default of China’s Evergrande, the world’s most indebted property developer, escalated. Meanwhile, uncertainty over whether the U.S. debt ceiling would be raised, further amplified the skittishness, all while the markets braced for the looming monetary policy decisions out of the U.S., U.K., and Japan later this week. Treasuries rose amid the global shift away from risk, to apply downside pressure on yields, and the U.S. dollar was little changed. Gold was higher and crude oil prices fell. September home builder sentiment unexpectedly improved to snap a three-month decline. Corporate news was relatively light today, but Pfizer and partner BioNTech SE announced positive top line results from their trial of their COVID-19 vaccine in children 5-11 years old.
The Dow Jones Industrial Average declined 614 points (1.8%) to 33,970, the S&P 500 Index fell 75 points (1.7%) to 4,358, and the Nasdaq Composite dropped 330 points (2.2%) to 14,714. In heavy volume, 1.1 billion shares were traded on the NYSE and 4.8 billion shares changed hands on the Nasdaq. WTI crude oil declined $1.68 to $70.14 per barrel. Elsewhere, the gold spot price rose $12.40 to $1,763.80 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was little changed at 93.22.
Treasuries rose amid the market skittishness as the yield on the 2-year note dipped 1 basis point (bp) to 0.21%, while the yields on the 10-year note and the 30-year bond decreased 5 bps to 1.31% and 1.85%, respectively.
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