Economy

Stocks slump again, putting S&P 500 back into red for year

Stocks slump again, putting S&P 500 back into red for year

The Nasdaq rose 3 percent, a day after it confirmed a correction and registered its biggest decline since 2011.

Major equity indexes in the USA started the day on the back foot and extended their slide before staging an unimpressive recovery in the second half of the session.

Market favorites like technology and consumer-focused companies have borne the brunt of the sell-off.

Amazon, Alphabet, Mattel and other big companies fell sharply after turning in disappointing quarterly results.

Japan's Nikkei index was down 3.3 percent at opening, shedding more than 700 points, while Hong Kong's Hang Seng index dropped by almost two percent.

The Dow Jones Industrial Average fell 608.01 points, or 2.41 percent, to 24,583.42, the S&P 500 lost 84.59 points, or 3.09 percent, to 2,656.1 and the Nasdaq Composite dropped 329.14 points, or 4.43 percent, to 7,108.40.

The absence of a tax-cut boost and the likelihood of higher interest rates, which can raise borrowing costs for businesses, are also giving investors reasons to worry that company earnings growth will slow.

The Dow is down 135.80 points, or 0.5 per cent. The Shanghai Composite index slipped 1.6 per cent to 2,561.36 and Hong Kong's Hang Seng index skidded 1.8 per cent to 24,785.68.

Adding to concerns, China reported last week that economic growth fell to the lowest level in a decade in the third quarter.

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TEARS IN TOYLAND: Mattel dropped 3.7 percent to $13.33 as investors reacted to the toy maker's latest quarterly snapshot. But Asian markets took big losses, as the USA market did the day earlier.

Texas Instruments, a major chipmaker, slumped 5.5 percent after its results missed forecasts.

Shares in iRobot plunged 12.3 percent to $80.49 after the robotics technology company said tariffs will reduce its profitability in the fourth quarter.

Meanwhile, Wealth manager AMP Ltd says it will sell its Australian and New Zealand wealth protection and mature businesses to London-based insurance firm Resolution Life for $3.3 billion. Bond prices rose, sending yields lower, as investors sought out less risky assets.

The indexes were pulled down by Amazon, Facebook and Netflix, all of which lost more than 5 percentage points in value, while Google-parent Alphabet plummeted 4.8 percent.

The Dow dropped 296.24 points, or 1.2 percent, to 24,688.31.

Amazon shares fell by as much as 10 per cent - its worst performance in four years - as its outlook for Christmas sales disappointed investors. The Kospi in South Korea dropped 1.6 percent.

Intel Corp (INTC.O) jumped 3.5 percent in extended trade after posting one of Thursday's few upbeat quarterly reports. The company also raised its estimates for the year, citing faster orders for aircraft. Brent crude, the benchmark for global oil prices, rose 0.9 percent to $76.89 a barrel in London.

CURRENCIES: The dollar fell to 111.99 yen from 112.61 yen on Thursday. The euro rose to $1.1408 from $1.1393.