Published: Mon, October 29, 2018
Finance | By Kristine Clayton

Nasdaq confirms correction while S&P 500 and Dow erase 2018 gains

Nasdaq confirms correction while S&P 500 and Dow erase 2018 gains

Stocks are opening modestly higher on Wall Street a day after a sharp sell-off erased the market's gains for the year.

The Nasdaq composite, with its hefty roster of tech stocks, has now fallen more than 10 per cent below its August peak in what Wall Street calls a "correction".

Two other giant USA companies, Amazon and Alphabet, will report their third-quarter results after the close of trading.

The S&P 500 fell 15.19 points, or 0.6 percent, to 2,740.69.

During Thursday's official trading session, all four FANG stocks rallied by between 3 percent and 7 percent, regaining some of the territory lost in recent weeks during a broad market sell-off. Google-owner Alphabet was down 5.5 per cent at one point after it too missed analyst estimates on revenue growth.

The benchmark S&P 500 index in the USA slid more than 1.7%, closing down nearly 10% from its September high.

The S&P 500 lost 3.1 per cent to 2,656.10 and has lost about 9.4 per cent from its September 20 peak.

The Cboe Volatility Index, the most widely followed barometer of expected near-term gyrations for the S&P 500, jumped 4.52 points to close at 25.23, its highest close since February 12.

Among gainers, McDonald's rose 6.3 percent after it beat estimates for quarterly same-store sales on strong demand in worldwide markets, while Verizon rallied 4.1 percent after it beat estimates for profit and net new phone subscribers.

Earnings for S&P 500 companies grew about 20 percent in the first and second quarters, and experts expect similar results for the third quarter.

Brent crude, the benchmark for global oil prices, dropped 0.5 percent to $76.52 a barrel in London.

Microsoft, whose strong results helped push the Nasdaq to its biggest daily gain since March just a day earlier, fell 1.2 percent.

The beaten-down S&P technology sector retreated another 4.4 percent. Britain's FTSE 100 was flat at 6,960, underperforming after poor earnings from ad giant WPP.

Texas Instruments fell 8.2 percent to $92.01 after the chipmaker delivered quarterly results that fell short of Wall Street's forecasts, noting that demand across most markets is slowing.

That, along with worries ranging from rising borrowing costs and bond yields to Italy's budget and upcoming United States mid-term elections, sparked a rout on Wall Street yesterday. Bond prices rose, sending yields lower, as investors sought out safer investments.

Earlier, Hong Kong's Hang Seng index lost 1.1%, while Japan's Nikkei 225 fell 0.4%. Brent crude, the benchmark for worldwide oil prices, added 0.9 percent to close at $77.62 a barrel in London. European markets also closed sharply lower. Heating oil added 1.2 percent to $2.28 a gallon and natural gas gained 1.1 percent to $3.20 per 1,000 cubic feet.

The dollar fell to 111.85 yen from 112.61 yen on Thursday.

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