November 29, 2014
Wall Street drops, S&P on track for worst daily decline since April
US stocks fell more than 1 percent today, with the S&P 500 on track for its worst daily decline since April and first monthly drop since January, as concerns mounted over the strength of overseas economies and ongoing tensions with Russia.
The benchmark index moved solidly under its 50-day moving average, a level it has not closed below since April 15. The moving average is viewed as a sign of short-term momentum, and selling accelerated after the level was breached.
All 10 macro S&P 500 sectors were down on the day, with energy among those leading declines with a drop of 1.8 percent.
The CBOE Volatility index jumped 23.3 percent to 16.43, its highest level since April, though well under its historical average of 20.
Argentina defaulted for the second time in 12 years. Investors had hoped for a midnight deal with holdout creditors, but the plan fell through. Even a short default will raise companies' borrowing costs, add to pressure on the peso, drain dwindling foreign reserves and fuel one of the world's highest inflation rates.
US labour costs recorded their biggest gain in more than 5-1/2 years in the second quarter and a gauge of trends in the jobs market fell to an eight-year low last week.
The Dow Jones industrial average fell 249.34 points or 1.48 percent, to 16,631.02, the S&P 500 lost 31.36 points or 1.59 percent, to 1,938.71 and the Nasdaq Composite dropped 79.52 points or 1.78 percent, to 4,383.38.
Meanwhile, European shares fell sharply today, with the euro zone's blue-chip index slipping to a three-month low, on concerns of an earlier than expected interest rate hike in the Uniteed States and a debt default by Argentina.
Spanish stocks came under severe pressure, with Madrid's IBEX dropping 2.1 percent, as traders cited worries over Spanish companies' exposure to Latin America after Argentina defaulted on its debt on Thursday.
Steep falls in some stocks following their earnings reports also hurt sentiment. The broader market sell-off accelerated in the afternoon after the US market opened lower and extended losses later in the session, with the Euro STOXX 50 falling 1.7 percent to its lowest since mid-April. Europe's main volatility index rose 9.4 percent to a three-month high.
Disappointing earnings reports also put pressure on some stocks, with German sportswear firm Adidas slumping 15.4 percent, the top faller on the FTSEurofirst 300, which ended 1.3 percent weaker at 1,349.34 points, its lowest close in three months and a weaker close for a second month.
Portugal's Banco Espirito Santo sank nearly 50 percent at one point to a record low after booking a 3.6 billion euro first-half loss, and disappointing earnings at Spanish healthcare firm Grifols sent its shares down 14 percent.