Dow ends lower amid fears of United States government shutdown

Muriel Colon
December 23, 2018

This photo made with a slow shutter speed shows the exterior of the New York Stock Exchange on Thursday evening, December 20, 2018.

The Dow Jones Industrial Average dropped 464 points, bringing its losses to more than 1,700 since last Friday.

U.S. stocks rebounded briefly after comments by a Federal Reserve official eased investor worries that the central bank was locked into raising rates in 2019. The S&P 500 is now down 7.7 per cent for the year and the Nasdaq is on the verge of a "bear market", which is a drop of 20 per cent from its peak this year.

The three major indexes swung between losses and gains of more than 1 percent as fragile investor nerves were tested by news of turmoil in Washington and soothing comments from an influential Federal Reserve official. Without a decent rally, this could be the worst December since 1931.

As of writing, the Dow Jones Industrial Average was up 0.5% on the day while the S&P 500 and the Nasdaq Composite were adding 0.3% and 0.12%, respectively.

The Nasdaq Composite Index was down 195.41 points, or 2.99 per cent, to 6,332.99.

The technology stocks that have led the market in recent years are now dragging it down.

The US economic growth was revised down to 3.4 per cent in the third quarter, slower than previously estimated, said the Commerce Department on Friday. The yield on the 2-year Treasury note fell to 2.62 percent from 2.65 percent.

A series of sharp declines over the past week have left stocks headed for their worst monthly loss in almost a decade.

The index finished the day down 21.9 percent from its August 29 record closing high, exceeding the 20 percent decline considered the threshold for a bear market. The Russell 2000 index of smaller-company stocks lost 33.92 points, or 2.6 percent, 1,292.09.

The S&P 500 fell 36 points, or 1.4 percent, to 2,471.

-Gold lost 0.8 percent to $1,258.10 an ounce and silver fell 1.1 percent to $14.70 an ounce.

Nike jumped 8.1 percent after reporting strong quarterly results.

The stock markets in France, Germany, Britain, Italy, Portugal, Spain, Tokyo and Hong Kong also fell.

A series of sharp declines have left stocks headed for their worst monthly loss in almost a decade.

It is the biggest weekly percentage drop since August 2011 while the Nasdaq's 8.36% decline is the sharpest since November 2008. The Dow Jones Small-Cap Growth TSM Index closed at 8235.47 for a loss of -161.60 points or -1.92%. Facebook Inc shares tumbled 6.3 percent, Inc shares slid 5.7 percent and Netflix Inc shares sank 5.4 percent. The bond-buying has the effect of sending long-term bond yields lower, which reduces interest rates on mortgages and other kinds of long-term loans.

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