Fears over a partial government shutdown coupled with the fourth hike in interest rates this year sent stocks reeling in afternoon trading.
The Dow Jones Industrial Average plunged more than 600 points at one point today, falling below 23,000 points — a threshold it hadn’t crossed since October last year. The S&P 500 also dipped 2.2 percent, while the Nasdaq Composite declined 2.4 percent.
(Just before market close, the Dow was down 576.89 points, or 2.47 percent, to 22,746.77.)
The sudden sell-off was triggered by word from the White House that President Donald Trump would refuse to sign a stopgap bill that did not include funding for his campaign-promised border wall. Shares had already dropped after the Federal Reserve announced yesterday that it would increase interest rates by another quarter percent.
“Despite this robust economic backdrop and our expectation for healthy growth, we have seen developments that may signal some softening relative to what we were expecting a few months ago,” Fed Chairman Jerome Powell said, indicating tighter monetary conditions come 2019.
Footwear stocks also suffered as major players including Tapestry Inc., Wolverine World Wide Inc., Michael Kors Holdings Ltd., Genesco Inc., VF Corp. and Caleres Inc. reported sinking figures. Similarly, Nike Inc. slid into the red — just hours before it was scheduled to deliver fiscal second-quarter earnings results. (Analysts initially forecasted a positive outlook for the athletic apparel giant.)
On the other hand, Skechers USA Inc., Foot Locker Inc. and Deckers Outdoor Corp. moved back into positive territory just before market close.
Although historically considered a strong month for markets, this December has proved dismal for benchmark indexes. Both the Dow and the S&P are on pace for their worst December since the Great Depression in 1931.
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