Markets

Dow industrials sink 831 points as tech companies plunge

Dow industrials sink 831 points as tech companies plunge

Dow Jones is a stock market index that shows how 30 large, publicly owned companies based in the US. Technology companies and retailers, including longtime market favorites Apple, Alphabet and Amazon, continue to slide.

It sets up the Australian sharemarket for steep losses to open the session, with futures at 7:35am AEDT pointing to a fall of 109 points, or 1.8 per cent, at the open. Delta Air Lines shares rose 3.8 percent after the airline beat profit expectations. The stock fell 16.8 percent to 49 cents. But eventually the high rates worry stock investors, as higher rates tend to increase borrowing costs and cut into profit margins.

The 10-year yield is now 3.20 percent, the highest in than seven years and up sharply form 2.82 percent in late August.

On Thursday, President Trump renewed his criticism of the Federal Reserve, blaming the recent downturn in the stock market on the Fed's rate policy. The Kospi in South Korea fell 3.6 percent to 2,148.97.

Technology shares tumbled on fears of slowing demand, while bond yields ended lower after seeing multi-year highs earlier this week.

Oil prices fell more than two percent as US stocks plunged, even though energy traders anxious about shrinking supply from Iran due to US sanctions and kept an eye on Hurricane Michael, which closed almost 40 percent of US Gulf of Mexico output.

The decline came amid a widespread selloff on Wall Street, which spilled over into global markets overnight as investors reacted to the "sheer magnitude of the move", OANDA analyst Stephen Innes wrote in a note to investors.

"When we have a recalibration in values, it's not surprising that it takes more than one day", said Art Hogan, chief market strategist at B. Riley FBR.

Three of the biggest American banks-JPMorgan Chase, Citigroup, and Wells Fargo-will report their third-quarter results Friday.

Tech stocks, hit hard Wednesday, fell slightly in early trading.

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Some of the big losers were stocks that have scored double-digits gains earlier in 2018.

In health care, CVS sank 7.2 percent to $73.25 and Aetna sagged 2 percent to $199.37 after the New York Post said New York state regulators have concerns about CVS' purchase of the health insurer.

Along with tech stocks, the FAANGs " Facebook, Amazon, Apple, Netflix and Alphabet" have led the market rally.

The S&P index recorded 10 new 52-week highs and 28 new lows, while the Nasdaq recorded six new highs and 90 new lows.

1 p.m.: This article was updated with the close of markets.

USA crude dropped 3 percent to $70.97 a barrel in NY. Brent crude, the worldwide standard, lost 2.2 per cent to $83.09 a barrel in London.

The Philadelphia Semiconductor index sank 2.64 percent, with Intel down 2.0 percent and Nvidia 4.7 percent. Natural gas fell 1.9 percent to $3.22 per 1,000 cubic feet. Silver dipped 0.5 per cent to $14.33 an ounce.

Gold rose 0.2 per cent to $1,193.40 an ounce.

The dollar fell to 111.98 yen from 112.59 yen, and the euro rose to $1.1593 from $1.1525.