The Dow Jones fell Friday to its lowest level of the year on Wall Street, dropping by more than 3%, or more than 500 points, on concerns for the global economy.
Featured index Dow Jones Industrial Average recorded its worst decline in one session for almost four years, losing 3.12% or 530.94 points to 16 459.75 points, depending on the final results.
He had not fallen to that level fence since October 2014. Compared to its peak in mid-May has now lost more than 10% which is a “correction” in stock market terms.
The Nasdaq, dominated by technology, even more heavily declined 3.52% or 171.45 points to 4706.04 points.
Particularly monitored by investors, the broader S & P 500 dropped 3.19%, or 64.84 points to 1970.89 points.
“You have to tie his belt,” acknowledged David Levy of Kenjol Capital Management. “The general feeling takes a very negative turn, and there was nowhere to run to.”
The main indices had already lost more than 2% yesterday, and many analysts believe that Wall Street, where company valuations are considered high compared to their actual earnings, is currently carrying out a genuine rebalancing down, feared long.
“It’s normal for the market to rebalance and expected, especially as he had not done consistently for years, but this is extreme today,” found Mr. Levy.
After several warning shots from the beginning of the summer, Wall Street seems really overtaken by worries about China, second largest economy after the United States. The Shanghai Stock Exchange fell by over 30% since the end of June, and again fell Friday after the announcement of a manufacturing activity at its lowest level in six years.
Fears with regard to China and, more broadly, the global economy revive concerns about a premature normalization of monetary policy by the Fed keeps its rates to near zero level since late 2008.
“I do not know if it’s the prospect of monetary tightening by the Federal Reserve (Fed) or simply the slowing global economy,” but “investors try to reduce their exposure to risk, because financial markets have gone very high in relation to the real economy, “summarized Jack Ablin, BMO Private Bank.
In this context, the fall of Wall Street has particularly struck several titles that had surged in the first half and that investors now seemed to question the upside: the Apple computer company fell 6.12% to 105.76 dollars and the online video service Netflix 7.58% to 103.96 dollars.
“We’ll see what happens next week, but this week has obviously done real damage to market sentiment,” said Michael James of Wedbush Securities.
Among the values, the computer group Hewlett Packard, close to its split, contradicted the trend by taking 0.44% to 27.47 dollars after reporting a higher profit expectations, despite declining results for most its activities, leaded by the strong dollar and the persistent crisis in the PC market.
The software company Salesforce has likewise gained 1.96% to 69.15 dollars after the publication of a sharp increase in quarterly revenues.
The chain Foot Locker stores, specializing in sports shoes, lost 3.76% to 69.02 dollars despite the announcement of a quarterly net profit up sharply, thanks to a jump of nearly 10% its sales on a comparable basis.
The manufacturer of mechanical equipment John Deere fell 8.12% to 83.29 dollars. Affected by lower demand for agricultural and construction machines, the group has revised down its annual profit forecasts.
Considered a safe haven, the bond market advanced slightly. Around 16 h 30, the yield on ten-year Treasury fell to 2.046% against 2.070% Thursday evening, and that good for 30 years at 2.738% against 2.743% yesterday.