NEW YORK — The Dow plunged nearly 832 points on Wednesday, the third-worst point decline in history.
All 30 Dow stocks were in the red, sending the index below 26,000 points for the first time in a month. The index fell by more than 3 percent.
The S&P 500 posted its fifth straight decline, plummeting nearly 3.3 percent. And tech stocks got hit particularly hard. The Nasdaq dropped more than 4 percent in the worst percentage decline since June 2016.
Stocks are in the midst of a scary October slump, sliding sharply because investors are worried about rising interest rates.
October has often been a nerve-racking month for investors, and this month is living up to that reputation.
All three indexes are in the red this month. But the Nasdaq has really taken it on the chin: It has plunged nearly 8 percent already in October.
The Dow’s point decline was the worst since February, when the index fell by more than 1,000 — twice.
The Dow’s percentage decline doesn’t crack the top percentage declines. The index fell 23 percent in 1914 and on “Black Monday” in 1987.
Tech is taking its lumps because bond yields have climbed in recent weeks, hovering at a more-than-seven-year high.
Although that’s largely because the U.S. economy is so strong, the spike in rates for the benchmark US 1.0.-Year Treasury has investors wondering if the near-decade-old bull market might finally be ending.
Higher long-term rates could slow down red hot sectors of the economy, including technology, especially as the Federal Reserve seems intent on raising short-term rates for the foreseeable future.
Higher rates increase borrowing costs, pinching corporate profits.
Investors may want to shift out of momentum and into more defensive stocks — companies that aren’t as expensive and also pay healthy, stable dividends.
Continued worries about a slowdown in China’s economy — especially as trade tension with the United States has escalated — were also dragging down the broader market.AlertMe