Stocks recover in European trading; Wall Street seen rising

Stocks recover in European trading; Wall Street seen rising

Troy Powers
October 29, 2018

The tech-heavy Nasdaq composite lost 163 points, or 2.2 percent, to 7,154.

Several companies sustained heavy drops after reporting disappointing quarterly results.

The Dow Jones Industrial Average fell more than 300 points and the S&P 500, the benchmark for many index funds, is now down 9.4 percent from its September peak.

The Dow Jones Industrial Average is 6.83 percent down from its all-time closing high and the Nasdaq 9 percent.

US stocks declined broadly in early trading Friday, erasing the market's gains from a strong rally a day earlier and putting major indexes back into the red for the year.

Earnings from S&P 500 companies are expected to have increased about 22 percent in the third quarter from a year ago, though 2018 is seen as a peak for the profit cycle, according to I/B/E/S data from Refinitiv. The Russell 2000 index of smaller-company stocks gave up 16.58 points, or 1.1 percent, to 1,483.82. Within that group around 180 stocks are now in bear market territory, with their shares having lost more than 20 percent of their value since hitting their 52-week high.

The S&P 500 had index plunged 9.2 percent since October 3 as investors anxious about climbing interest rates and the effects of the U.S-China trade dispute.

The Dow is down 135.80 points, or 0.5 percent. Natural gas declined 1.4 percent to $3.17 per 1,000 cubic feet. Japanese telecom and energy giant Softbank lost 4.4 percent.

Market favorites like technology and consumer-focused companies have borne the brunt of the sell-off.

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The FTSE 100 closed down 0.92 per cent, or 64.54 points, to 6939.56, while the FTSE 250 shed 0.96 per cent, or 178.63 points, to 18,352.90.

Microsoft jumped 5.4 percent, Visa rose 2.9 percent and Comcast climbed 3.3 percent.

The Nasdaq dropped almost 2 percent, sharply cutting its gains for the year and moving deeper into correction territory, while the blue-chip Dow shed 1.1 percent and the benchmark S&P fell 1.56 percent, putting under threat their slim gains for the year. Bond prices continued to rise, sending yields lower.

United States stocks fell on Tuesday after worries about the earnings outlook added to recent selling pressure, though major indexes ended well off the day's lows as investors snapped up beaten-down shares late in the session. On Wednesday it edged up 0.6 per cent Brent crude, used to price global oils, gained 4 cents to $76.21 a barrel.

Major equity indexes in the USA started the day on the back foot and extended their slide before staging an unimpressive recovery in the second half of the session.

The beaten-down technology sector fell 1.37 percent, led by chipmakers, over concerns of slowing growth in China and ahead of key earnings.

CURRENCIES: The dollar strengthened to 112.51 yen from 112.47 yen on Tuesday.

"What makes the latest volatility more troubling is that it's been hard to identify one specific cause", Kerry Craig, global markets strategist at JPMorgan Asset Management, told Bloomberg.

"Market technicals are showing signs of improving, with fewer stocks reaching 4-week lows yesterday and weak market depth of trading activity likely close to a bottom", Draho added. Hong Kong's Hang Seng sank 1.1 percent.