Wall Street drops sharply one day after giant rally

Noel Cummings
March 28, 2018

The Dow Jones Industrial Average rose more than 650 points Monday as trade tensions between the United States and China eased.

The market slide erased modest gains from earlier in the day and much of a powerful rally from the day before. Investors bid up shares in safe-play stocks like utilities and real estate companies.

The apparent realization came after a Financial Times report Monday stating China may be in talks to buy USA semiconductors to help cut its trade surplus and avoid the proposed tariffs.

By the close, the Nasdaq fell 2.4%, the S&P 500 lost 2.1% and the Dow retreated 1.8%.

The S&P 500 rose 46 points, or 1.8 percent, to 2,635. The 30-company average had been down 493 points. The Nasdaq climbed 84 points, or 1.2 percent, to 7,076. The Russell 2000 index of smaller-company stocks picked up 15 points, or 1.1 percent, to 1,526.

Frank Cappelleri, executive director at Instinet said: "The S&P 500 comes into the last week of March and the 1st quarter after of the worst weekly showings in the last decade". Microsoft shares posted the best performance, raising by 7.57%. Twitter (NASDAQ:TWTR) gained 2.77% to US$31.91, while Apple (NASDAQ:AAPL), the world's most valuable firm, added 4.75% to US$127.77.

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Bank of America is up 4.68%. Tuesday represented the biggest one-day percentage decline for both the Dow and the Nasdaq since February 8, but only the biggest for the S&P since Friday.

BOND YIELDS: Bond prices fell.

The Dow industrials were up 486 points, or 2.1 percent, at 24,022.

Traders welcomed the latest corporate deal news.

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Elsewhere, 10-year Treasury yields edged higher ahead of major debt sales.

ENERGY: Benchmark U.S. crude added 17 cents to $65.72 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price global oils, shed 23 cents to $69.58 in London.

Shares of Boeing and Caterpillar were up about 3 per cent in early trading.

CURRENCIES: The dollar rose to 105.20 yen from 104.82 yen on Friday. The euro strengthened to $1.2455 from $1.2367.

Major indexes in Europe finished higher.

Global markets were also higher Monday with Germany's DAX up 0.33% and Japan's Nikkei closing up 1.75%. Britain's FTSE 100 gained 0.3 percent.

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The Bloomberg Dollar Spot Index declined 0.4 percent to the lowest in five weeks. Hong Kong's Hang Seng added 0.8 percent.

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