Roller-coaster Dow leaves markets braced for turmoil

Dealers are bracing themselves for a day of turmoil on world stock markets after shares took a nerve-jangling tumble on Wall Street yesterday with investors continued to worry about continuing strength in the United States economy and the spectre of a long run of rising interest rates.

By the close last night, the Dow Jones Industrial Average was off by a dizzying 157.11 points, or 2.3 per cent, at 6,583.48. The fall, which computerised trading curbs failed to halt, came on the heels of the index's 140-point loss last Thursday.

While some analysts continued to argue that the return of the bear to the Wall Street represented no more than the correction that many had been expected, others were sounding alarm bells. Any slippage beneath the psychologically-important 6,600 level could instil more generalised fears, if not investor panic.

The story was similar across the markets. The technology-heavy Nasdaq exchange was also hurting badly yesterday - it was off more than 15 points at midday. Dealers are bracing themselves for volatile trading today after shares plunged again on Wall Street yesterday. Equities are expected to take their cue from a US market that returned from the shorter American Easter holiday as nervously as it had entered the break.

After a 140-point fall last Thursday in New York, the Dow Jones index fell sharply in early trading yesterday as dealers banked on another rise in American interest rates following last week's quarter-point increase. The Dow was trading 107.64 points off at 6,632.95 in midday trading, having been 140.8 down at mid-morning.

Shares were especially nervous ahead of economic data this week that could shape perceptions about inflation, interest rates and the stock market's future health. Later today the March survey of manufacturing conditions from the National Association of Purchasing Management will be published, while on Friday the Labor Department releases the March employment report.

The slide resumed immediately after the opening bell yesterday, leading to an early activation of computerised trading curbs on the New York Stock Exchange. It was a similar story of pain elsewhere. The technology-heavy Nasdaq exchange was also hurting badly yesterday - off 28 at 1,221 by the close. Nor was there much help forthcoming from the bond market, where the yield on the benchmark 30-year Treasury bond, after steadying briefly in early trading, began to climb again. At last Thursday's close, the yield was at 7.08 per cent, its highest level since last September.

Once bond yields break through the 7 per cent barrier, investors often begin looking towards the bond market and away from equities as the best place for their dollars.

Most analysts continued to attribute the onset of market turbulence to last week's Federal Reserve decision to raise short-term interest rates by a quarter-point. There is still concern that further increases may be around the corner.

Fuelling that worry was additional data yesterday pointing to an overly healthy US economy. The Commerce Department reported that Americans' personal income jumped 0.9 per cent in February, the largest gain in nine months.

While spending grew by a much more modest 0.3 per cent - the smallest gain since for six months - it came after a full 1 per cent surge in January.

"The data will keep the market on the defensive," said Peter Cardillo of Westfalia Investments.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
i100
Extras
indybest
News
peopleLiam Williams posted photo of himself dressed as Wilfried Bony
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Arts and Entertainment
The Apprentice finalists Mark Wright and Bianca Miller
tvBut who should win The Apprentice?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick