Thursday, October 16, 2014

Stocks Swoon in Frenzied Trading -- Dow Slides More Than 450 Points Before Climbing; Treasury Yields Touch 16-Month Low --- Frenzied trading swept global financial markets Wednesday, with the Dow industrials tumbling as much as 460 points before partially recovering and investors scrambling to buy safe-haven government bonds. -- Wednesday’s session briefly saw U.S. Treasury yields plunge to their lowest level in 16 months, in what traders said was the sharpest move in years, and the S&P 500 stock index wipe out its gains for 2014. Then both markets made U-turns. Oil prices continued this month’s deep slide, with Nymex crude falling six cents to $81.78 a barrel, off 24% since June. -- While disappointing economic news in Europe and the U.S. provided the backdrop for Wall Street’s most turbulent day since 2011, traders said the outsize moves were magnified by hedge funds and other short-term players bailing out of money-losing investments. Traders expressed amazement at the wild ride, which came on enormous trading volume for both stocks and bonds -- “A lot of people, even the most experienced guys, are dazed by this,” said Michael Purves, head of equity-derivatives research at Weeden & Co. -- The heavy waves of selling in stocks Wednesday and the mad dash to buy bonds marked an intensification of tumultuous trading that has enveloped financial markets in recent weeks. While some traders said the early collapse and late recovery could suggest the worst of the selling is over, the intensity of the market’s recent moves has many investors remaining wary. -- The Dow Jones Industrial Average closed down 173.45 points, or 1.1%, at 16141.74. During afternoon trading, the 30-stock index was off as much as 2.8%. -- The selloff continued early Thursday in Asia, with Japan’s Nikkei down 2.1%, Hong Kong’s Hang Seng index and Australia’s S&P/ASX 200 both down 1% and South Korea’s Kospi down 0.7%. -- The Dow has lost 852.48 points, or 5%, over the past five trading days. Reflecting the heightened volatility in the stock market, the Dow has closed up or down by more than 1% seven times in October. -- In the background, fears of a global economic slowdown, dangerously low inflation in Europe and ripples from a steep drop in oil prices have contributed to end a long period of relative calm for global markets. As recently as mid-September, stocks were grinding out new highs despite growing geopolitical turmoil and expectations the Federal Reserve was getting ready to scale back its efforts to support the U.S. economy. -- Read More, WSJ,


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