Dow Drops 366 Points as Reality Sets In

Dow Drops 366 Points as Reality Sets In

Dow Drops 366 Points as Reality Sets In

U.S. stocks tumbled 1% on Thursday in a broad-based decline led by energy shares, giving back some of the gains from a spectacular rally a day earlier that helped the blue-chip Dow Jones Industrial Average surge more than 1,000 points for the first time ever.

The Dow Jones Industrial Average jumped more than 1,050 points (4.98 per cent), and all but one member of the Standard & Poor's 500 advanced, pushing that index up by 4.96 per cent. The tech-heavy Nasdaq gained 265 points, or 4.3 percent, to 6,458. Among big retailers, Amazon rose 9.4 percent, Kohl's 10.3 percent and Nordstrom 5.8 percent.

One thing's for sure, for investors starved of good news all month, Wednesday brought it coursing back in a flurry. The S&P posted a 2.9 percent pop in afternoon trading.

Markets were roiled ahead f the Chrismas break due to a number of political headlines taking the limelight. On Christmas eve Trump tweeted: "The only problem our economy has is the Fed".

White House economic advisor Kevin Hassett also sought to reassure on Powell's prospects, telling ABC News the Fed chief is "100%" safe. President Donald Trump, after ripping up trade policies aimed at stitching global economies together, has further unsettled markets by signaling he wanted to fire Federal Reserve Chairman Jerome Powell. He said that call, meant to assure, may have induced panic in the markets. Marathon Petroleum rose 1.9 percent to $55.36. Stock exchanges in London, Frankfurt, Hong Kong and Australia remain closed and will have to digest the recent turmoil when they reopen Thursday.

President Trump's criticism of the Fed and Powell has shaken Wall Street as it weathers its worst December in history. The Federal Reserve is raising interest rates - it indicated two more increases may arrive in 2019 following four this year- and other central banks are stepping off the accelerator on stimulus for their economies, which remove big supports.

Economists called the big market moves a "reflex rally" after Monday's drop, which left Wall Street on track for its worst December since the Great Depression. It also created a lot of heartburn getting there, with two separate drops of 10 percent over the course of the year. The index fell to 21,792.20 points at the end of trading, down 18.8 percent from its peak on September 20.

The usual absence of economic data during this period also gives traders little confidence for building positions. Adobe rose 8.7 per cent to $222.95.

The International Monetary Fund expects USA economic growth to slow to 2.5 percent next year from 2.9 percent in 2018.

Big retailers were among the gainers. At that bottom, the gauge experienced three days of gains greater than 1.5 percent - and continued on to its best month in 20 years.

The partial US government shutdown that started Saturday is unlikely to hurt the economy much, although it may deprive the financial markets of data about global trade and gross domestic product.

CURRENCIES: The dollar eased to 110.90 yen from 111.37 yen late Wednesday.

The slide in USA markets followed a sell-off in major indexes in Europe. The euro weakened to $1.1387 from $1.1404. South Korean shares tumbled after a holiday, and Shanghai stocks fell for a second day.

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