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Wall Street sinks as DoubleLine's Gundlach says stocks are in bear market

The Dow Jones Industrial Average fell 446.62 points, or 1.85 percent, to 23,653.89

Reuters  |  New York 

Wall Street, US stocks

Wall Street's major indexes each slid more than 1 percent on Monday on concerns about slowing growth and as DoubleLine Capital's suggested that U.S. stocks are in a bear market.

Speaking in a CNBC interview, Gundlach, chief executive officer of and known on as the Bond King, also said that the Federal Reserve should not raise interest rates. His comments pushed U.S. stocks to session lows.

The S&P 500 Financial sector index gave up its earlier intraday gains after Gundlach's comments and was last down 0.8 percent, though it still had the lowest percentage decline among the S&P 500's major sectors.

"The right now are emotionally drained and are very prone to sell-offs," said Oliver Pursche, chief market strategist at in New York. "It's really about sentiment, and the Gundlach statement didn't help the market."

Gundlach's bearish comments added to investors' skittishness, which had been fanned earlier in the session as the indicated homebuilder sentiment had fallen to a three-and-a-half-year low.

A profit warning from British retailer ASOS raised concerns about weakening consumer strength despite robust U.S. retail sales data last week. The S&P 500 Retailing Index  fell 3.2 percent, and shares of dropped 4.1 percent. Amazon was the biggest drag on the Nasdaq and the second-biggest drag on the S&P 500.

"Because of the profit warning, there is an overall question of holiday spending," said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in

But a dovish statement from the Federal Reserve indicating a slower pace of interest-rate hikes could lift market sentiment, investors said. The Federal Open Market Committee is scheduled to meet on Tuesday and Wednesday.

The Dow Jones Industrial Average fell 446.62 points, or 1.85 percent, to 23,653.89, the S&P 500 lost 48.5 points, or 1.87 percent, to 2,551.45 and the Nasdaq Composite dropped 137.66 points, or 1.99 percent, to 6,773.00.

The S&P dropped 2.0 per cent after a federal judge late on Friday ruled that the Affordable Care Act, commonly known as Obamacare, was unconstitutional based on its mandate requiring people to buy

Shares of insurer fell 2.5 percent in the wake of the Obamacare ruling and was the biggest drag on the Dow.

shares fell for a second consecutive session following a Reuters report that the company knew for decades that its Baby Powder contained asbestos. J&J shares were last down 3.5 percent.

shares dropped 3.2 percent to a two-year low after filed criminal charges against the bank in connection with an investigation into suspected corruption and money laundering involving the sovereign wealth fund 1MDB. The stock has the biggest year-to-date percentage decline among members of the

Declining issues outnumbered advancing ones on the NYSE by a 3.92-to-1 ratio; on Nasdaq, a 2.78-to-1 ratio favoured decliners.

The S&P 500 posted one new 52-week high and 108 new lows; the Nasdaq Composite recorded eight new highs and 473 new lows.

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, December 18 2018. 01:46 IST
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