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Stocks Plunge Again as Dow Drops

  • Specialist John O'Hara works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. Stocks are slumping for a second straight day as the market endures its most volatile stretch since February. (AP Photo/Richard Drew)

  • Trader Thomas Ferrigno works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. U.S. stocks are mostly lower in unsteady trading one day after their biggest drop since February. (AP Photo/Richard Drew)

  • Trader Phyllis Arena Woods works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. U.S. stocks are mostly lower in unsteady trading one day after their biggest drop since February. (AP Photo/Richard Drew)

  • Trader Peter Tuchman works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. The market's recent decline was set off by a sharp drop in bond prices and a corresponding increase in yields last week and early this week. (AP Photo/Richard Drew)

  • Trader Michael Capolino works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. The market's recent decline was set off by a sharp drop in bond prices and a corresponding increase in yields last week and early this week. (AP Photo/Richard Drew)

  • Specialist Peter Mazza works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. Stocks are slumping for a second straight day as the market endures its most volatile stretch since February. (AP Photo/Richard Drew)

  • Trader John Panin works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. Stocks are slumping for a second straight day as the market endures its most volatile stretch since February. (AP Photo/Richard Drew)

  • Trader Mark Muller works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. Stocks are slumping for a second straight day as the market endures its most volatile stretch since February. (AP Photo/Richard Drew)

  • Trader Edward Curran, center, works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. U.S. stocks are slightly higher in unsteady trading one day after their biggest drop since February. (AP Photo/Richard Drew)

  • Specialist Anthony Rinaldi works on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. The market's recent decline was set off by a sharp drop in bond prices and a corresponding increase in yields last week and early this week. (AP Photo/Richard Drew)

  • Gregory Rowe, center, works with fellow traders on the floor of the New York Stock Exchange, Thursday, Oct. 11, 2018. The market's recent decline was set off by a sharp drop in bond prices and a corresponding increase in yields last week and early this week. (AP Photo/Richard Drew)



AP Markets Writer
Thursday, October 11, 2018

New York — U.S. stocks sank more than 2 percent on Thursday, the second day of steep declines around the globe driven by concerns about rising interest rates and trade tensions that could slow economic growth.

The Dow Jones Industrial Average fell 545 points after dropping 831 points on Wednesday. The two-day loss of 5.3 percent is the biggest for Dow since February. The S&P 500 also is down more than 5 percent over the two days and after falling for the past six trading days is almost 7 percent below its Sept. 20 high.

The recent turbulence in financial markets is a contrast to what investors have grown accustomed to in a bull market that has lasted more than 10 years, the longest in history. A hallmark of the past decade has been ultra-low interest rates, which the Federal Reserve used to promote growth in the aftermath of the 2008 financial crisis.

The Fed has been gradually raising interest rates over the past two years, after not having increased them since the recession. Those higher rates have been the catalyst for recent selling, stoking concerns that slower growth would impinge on corporate profits.

The selling on Thursday was widespread. Energy companies sank along with oil prices and CVS lead a rout in health care stocks. Technology companies and retailers, including longtime market favorites Apple, Alphabet and Amazon, extended their recent slide.

“There isn’t much of a place to hide right now in the equity market,” said Willie Delwiche, an investment strategist at Baird.

Seeking safety, investors bought gold and government bonds. That pushed bond prices up and their yields down, ending a surge in yields that had touched off the market’s current decline. But investors found more things to worry about.

There are ongoing concerns about the unresolved trade dispute between the U.S. and China. Strong earnings reports in the coming weeks could soothe investor nerves, but negative comments from company executives about future profits could have the opposite effect. Recently a larger-than-normal number of companies have warned that their third-quarter results could be weaker than analysts expected.

The benchmark S&P 500 index rose in morning trading, but ultimately gave up 57.31 points, or 2.1 percent, to 2,728.37, its lowest close in three months. The index has declined 6.7 percent during its current losing streak. That’s its steepest downturn since a 10-percent drop in early February.

The Dow Jones Industrial Average lost 545.91 points, or 2.1 percent, after falling as much as 698. The Nasdaq composite skidded 92.99 points, or 1.3 percent, to 7,329.06. The Russell 2000 index of smaller-company stocks fell 30.03 points, or 1.9 percent, to 1,545.38.