Finance: Dow craters as much as 1,500 points as stock swing wildly in 2nd day of selloff

Finance: Dow craters as much as 1,500 points as stock swing wildly in 2nd day of selloff


After a round of buying the dip at the open, markets are now trading lower again.

  • The Dow opened lower by about 250 points on Monday following last week's slide.
  • After a round of buying the dip at the open, markets are now trading lower again.
  • Watch the Dow trade in real time here.

The US stock market is plunging again for a second day, with the Dow Jones Industrial Average down as much as 1,500 points by Monday afternoon. All 30 stocks in the Dow are now trading in the red, and the index has now erased all gains for the year.

The decline follows a 666-point drop in the Dow on Friday, its biggest single-day point drop since October 2008, the index opened down another 250 points on Monday.

Stocks have been lower from the start of trading, though they recovered early losses before selling resumed. The Dow is now trading 5.85%, or 1,500 points, lower. Elsewhere, the S&P 500 is down 2.48%, and the Nasdaq 100 is down 2.48%.

Traders are flocking to the safety of US Treasurys amid the selloff in stocks, with the 10-year yield down 5 basis points at 2.80%. Bond yields tend to go down as demand, and therefore prices, go up. The benchmark yield hit 2.85% after Friday’s jobs report, its highest since January 2014.

"Suddenly, inflation has become one of the most-talked about issues in markets, reviving many late-cycle concerns over Fed tightening, corporate margins, volatility, stock/bond correlations and hedging strategies versus asset allocation," JPMorgan strategist John Normand wrote in a note to clients Monday.

If the S&P 500 falls more than 7% in a day, a circuit breaker will be tripped in attempt to cool markets and give investors and the markets a chance to catch up on the rapid moves, according to SEC rules.

Wells Fargo is among the biggest losing stocks on Monday. Shares of the bank are down 8.70% to $58.47 after the Federal Reserve barred the bank from growing any larger until it improves its compliance and governance policies.

The Business Insider team has been hard at work analyzing the recent downturn in the markets. Here are some of the best stories explaining why the markets are in decline …

  • Hedge funds are making an unprecedented bet that's signaling more stock market pain. Some of the market's most influential investors are making an unprecedented bet that near-term bond yields will climb — and that could continue heaping pressure upon stock traders.
  • The global stock bloodbath has nervous traders doing something not seen since the presidential election. For much of the stock market's blistering bull market run, investors have stayed remarkably calm, with measures of fear locked near historical lows.
  • Bitcoin dives below $7,000 for the first time since November 15. The cryptocurrency is down nearly 64% since hitting an all-time high above $19,000 in December.
  • Stocks are reeling over something most people were hoping for. Driving the selloff are fears of a potential surprise in inflation following US tax cuts and signs of firmer wage growth in Friday's jobs report.

Many of the mega-cap tech names that reported earnings last week are rebounding on Monday. Apple, Amazon, Microsoft, and Google all started Monday down 1.5% to 2% but are now trading higher.

Also Monday, Broadcom extended another offer for its rival chipmaker Qualcomm. The previous $103 billion bid was upped to $120 billion, even though Qualcomm has previously said it is not interested in selling.

This story is devloping, check back for more.

Read more about what's happening today in the markets.

Click here to read the full text by Seth Archer

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