The broad slump wiped out two months of gradual gains, jolting the market out of a mostly flat course over the past several weeks.
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The SPX is not cheap and Consumer Staples and other low growth stocks remain vastly overpriced but some stocks remain extremely attractive on valuation and this is the message for now and the allegory for investing overall.
“The Fed’s been telling us for two years they are going to raise rates”, he said during an interview on FOX Business Network’s Countdown to the Closing Bell With Liz Claman.
The Dow gave up 394.46 (-2.13 percent) to finish at 18,085.45. The Standard & Poor’s 500 index slid 53.49 points, or 2.5 percent, to 2,127.81. The Nasdaq composite index lost 88 points, or 1.7 percent, to 5,171.
U.S. stocks had rallied to records in the last two months after plunging following the June 23 British vote to exit the European Union.
The US Treasury market has been moving in tandem with JGBs over the past six months, analysts said, since Japanese investors of late have been the biggest buyers of US government debt.
The dollar index, which tracks the US currency against a basket of six currencies, rose 0.4 percent to 95.438, nearing its highest levels on Tuesday before a weak USA service sector report knocked the dollar 1 percent lower. For the month to date, the Dow is 1.7% lower, the S&P 500 is off 2%, and the Nasdaq down 1.7%. Speaking before markets opened, Boston Fed President Eric Rosengren said that the improving job market is finally starting to lead to higher wages for workers.
The policy-setting Federal Open Market Committee meets September 20-21 in Washington.
Wall Street suffered its biggest one-day drop since the Brexit selloff in June as investors priced in the rising odds of an interest rate hike this year. As yields rise, bonds become more competitive options for investors seeking income.
Oil prices closed lower after rallying a day earlier. Benchmark US crude fell 1.74 dollars, or 3.7%, to close at 45.88 dollars a barrel. Brent crude, used to price worldwide oils, was down $1.61, or 3.2 percent, at $48.38 a barrel.
NEVER MIND: Williams Cos. fell 3.2 percent on news that Enterprise Products Partners has told the natural gas company it is no longer interested in a possible merger. Transocean shed 57 cents, or 5.4 percent, to $9.90, while Marathon Oil slid 86 cents, or 5.2 percent, to $15.88.
Strong quarterly results helped lift furniture and housewares retailer Restoration Hardware and fiber optic components supplier Finisar. Restoration Hardware gained $1.34, or 3.8 percent, to $36.63. Finisar added $2.97, or 12.8 percent, to $26.20. Although no rate increase is expected, the central bank may signal its willingness to continue normalizing monetary policy sooner than previously expected. Britain’s FTSE 100 was down 1.2 percent.
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In Asia, the focus was on North Korea’s apparent test of a nuclear warhead that it claimed could be mounted on a missile. Yields rose as high as 1.678 percent, an 11-week high.
