Dow closes more than 500 points lower as stock-market rout persists

[Quixote1818]

The Dow Jones Industrial Average tumbled by more than 500 points on Monday as the equity benchmarks in the U.S. The Dow DJIA, -2.11% finished off 508 points, or 2.1%, at 23,592, marking its lowest since March 23, 2018, the S&P 500 index SPX, -2.08% declined by 2.1% at 2,545, finishing at its lowest level since Oct. 9, 2017, while the Nasdaq Composite Index COMP, -2.27% ended 157 points, or 2.3%, lower at 6,754, putting in its lowest finish since November of 2017, according to Dow Jones Market Data. The declines come fresh off an ugly Friday session that saw the Dow enter correction territory, widely defined as a drop of at least 10% from a recent peak. Meanwhile, the 10-year Treasury note TMUBMUSD10Y, -1.31% was yielding 2.86%, pulling back from its Friday values, indicating buying in government bonds and a so-called risk-off mode in the market with investors fleeing to the perceived risk government bonds. Bond prices rise as yields fall. Health-care stocks were under pressure after a Federal judge ruled that Obamacare unconstitutional. All 30 Dow components finished the day in the red, led by a 4.5% loss for American Express Co. AXP, -4.28% while all 11 sectors of the S&P 500 wrapped up in negative territory. The Nasdaq's losses erased all of its year-to-date gains and currently stands down 2.2% for 2018 thus far. The Fed concludes its rate-setting meeting on Wednesday at 2 p.m. Eastern Time.

Link: https://www.marketwatch.com/story/dow-tumbles-more-than-350-points-as-stock-market-carves-out-fresh-monday-nadir-2018-12-17

In other stock market news: The stock market is on pace for its worst December since the Great Depression

https://www.cnbc.com/2018/12/17/worst-start-to-december-for-the-stock-market-since-great-depression.html

[Algernon Moncrieff]

1. The DJIA still isn't quite to Bear Market territory

That is somewhere between 21400 and 21500. That said, it's ugly. I'm guessing we are going to get disappointing Xmas sales numbers, more retail hemorrhaging, and a softer housing market. Government shutdown and the prospect of government belt tightening also doesn't thrill investors.

[Blue_true]

5. Before I read your post, I was thinking that 21000 would be the breaking point.

If it hits 21000, it's "Whoa Nelly" time. From there it may slow at 18,000, but if that is broken on the downside, no telling where the bottom will be.

People were warned. The time to be completely out of stocks was by late spring (last year would have been even better). The problem now is the herd rush effect, if the big declines continue, lots of people will rush for the exits at once, like in late 2007, early 2008.

[Algernon Moncrieff]

7. Were you around in '87?

One day, in October of '87, the Dow dropped 508 points. "So?" everyone under 30 asks? Well, the thing is that the market was in the mid-2000s back then. The 508 point drop to 1,738 represented a 22.61% drop. Even the two four-figure drops earlier this year were drops of less than 5%. To give you an idea, such a drop based on today's close would represent a retreat to 18,258 - a drop of 5,334 points.

I don't think a one-day drop of that magnitude is impossible, but it's not nearly as likely. Two reasons - built in market circuit breakers to stop freefalls, and (maybe more important) brokerages have computers that are bound and determined to buy on big drops (who doesn't like discounts?). But we can now end up in cycles where a net-downward pattern can take hold for weeks of months. Down day, down day, up day, down day, down day, up day - and the cycle repeats for a while.

CBS Market Watch - The last key death cross is poised to engulf the stock market

FYI, this is interesting. It's a company unlikely to go out of business; it's stock is trading at an accessible price; and at this price, the effective yield is just under 7% - no bank pays like that.

https://www.fool.com/investing/2018/12/12/why-ford-motor-companys-68-dividend-is-still-a-goo.aspx

[Blue_true]

10. The auto business has some rough sledding ahead of it.

If it was a solid basic staples food company stock that was yielding at just under 7%, I would be all over it, but an auto or steel company, no way.

I was around in 87, a recent engineering school grad. Yeah, that drop scared a lot of people shitless.

[Algernon Moncrieff]

11. Ford has good cash reserves, and they sell a steady stream of F-150s

I'm less hopeful about GM or Chrysler. But I take your point.

[doc03]

2. So much winning nt

[duforsure]

3. Now that trump and the gop are killing the Obama economy

The spiral downward starts getting seriously bad again for the nation. Just like it did under W Bush , but this will be much worse with all the stuff trump and the gop have done. The trumpets will get hurt the worse, and maybe then they'll realize what a fool they were for voting for this.

[central scrutinizer]

4. Not a chance

In just a month, they will learn via Fox News and Drumpf that it is all the fault of Nancy Pelosi and the libs.

[Blue_true]

6. The county that I live in went for Trump by about 10%.

Lot more repugs than democrats. During 2007/2008, the place became a ghost town, lots of places went out of business, lots of people lost jobs or businesses. I hate to see people suffer, but getting in the face of a Trump voter and saying "I told you so" might be too appealing.

[Yo_Mama_Been_Loggin]

8. Old Trumpy has the reverse Midas touch

Everything he touches turns to shit.

[oasis]

9. +1